Bank Balances Shift With Rule Changes: After One Tweak Improved the Books, Another Could Erase Gains and More

The Washington Post reports:

A controversial change in accounting rules earlier this year has allowed banks to claim billions of dollars in additional earnings simply by tweaking their bookkeeping, greatly enhancing the appearance that the industry is returning to health.

A study by an accounting expert found that 45 financial firms reported higher first-quarter earnings because of the change. The total benefit exceeded $3 billion. Some large firms, including Prudential Financial and Bank of New York Mellon, were able to report profits rather than losses.

An article for anyone who studies fundamentals.