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Conventional Principal and Income Accounting and Its Effect on Institutional Investment Policy
Financial Analysts Journal
Vol. 25, No. 2 (Mar. - Apr., 1969), pp. 60-67
Published by: CFA Institute
Stable URL: http://www.jstor.org/stable/4470494
Page Count: 8
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Conventional rules regarding accounting distinctions between principal and income are deeply entrenched both in law and custom. These rules require that capital gains on the investment portfolios of universities and other institutions must be treated as principal accretions and cannot be included in income. Has this requirement had a deleterious effect on the investment policies followed by American institutions during these last twenty years of unparalleled economic growth? If so, isn't it time that the rules be scrapped?
Financial Analysts Journal © 1969 CFA Institute