Section 21.4. Accretion of discount on securities

In order to conform to the reporting requirements of the Securities Exchange Act of 1934 (15 U.S.C. § 78c et seq. (1971)), State banking institutions shall be permitted to accrete discount, by increasing book value not in excess of par value on obligations of the Federal Government, State or political subdivisions, and corporate obligations of investment grade purchased at a discount, by one of the following bookkeeping methods:

(1) Accumulation of discount in a reserve account until the security written up to par value is disposed of, when proper credit would be made to the undivided profits account.

(2) Taking discount directly into undivided profits as the book value is increased.

The provisions of this § 21.4 adopted by Secretary’s Letter dated May 25, 1965 and amended by Secretary’s Letter ‘‘D,’’ dated November 30, 1965, and through August 8, 1975, 5 Pa.B. 2026. Immediately preceding text appears at serial page (2001).