Definition of Financial Accounting Standards Board(FASB) 115

new rule entitled "Accounting for Certain Investments in Debt and Equity Securities," which requires most fixed maturity investments to be listed on the insurance company's financial statements at market value beginning in 1994. This rule stipulates three categories of investment to be affected:

1. Securities Available for Sale-securities that are available for sale but are not considered securities held for trading.
2. Securities Held to Maturity-securities that the insurance company has both the intent and ability to hold to maturity. Such securities would be listed on the company's financial statement at amortized cost. See also amortization; amortization schedule.
3. Trading Securities-securities that are bought for the purpose of trading in order to realize a profit. These securities are listed on the financial statements valued at market with any changes in the market value recorded on the income statement.
   All of the above adjustments result in increases as well as decreases in book value and thus will have a direct effect on the numerous calculations that are a function of the book value, such as the return on equity.