N.Y. Banking Law § 242: Assets; how entered and carried on books; disallowance by superintendent

§ 242. Assets; how entered and carried on books; disallowance by

superintendent. 1. No savings bank shall by any system of accounting or

any device of bookkeeping, directly or indirectly enter any of its

assets upon its books in the name of any individual, partnership or

unincorporated association or of any other corporation, or under any

title or designation that is not truly descriptive thereof, except as

authorized by the provisions of this article.

2. The stocks, bonds, promissory notes or other interest-bearing

obligations purchased by a savings bank shall be entered on its books at

the actual cost thereof, and shall not thereafter be carried upon the

books at a valuation exceeding their cost as adjusted by amortization

for the purpose of bringing them to par at maturity; and where

securities purchased at a premium are callable prior to maturity, the

rate of amortization thereof shall be increased when necessary to such

extent as shall reduce the amount at which such securities are carried

upon the books to the call price at the date or dates upon which a call

may be made. No adjustment for amortization shall be required to be made

on the books except when the books are closed for the purpose of

computing net earnings. The superintendent may by regulation vary the

requirements of this subdivision to permit the amortization of premiums

at the same rate as that required by federal tax statutes or

regulations.

3. No savings bank, without the written approval of the

superintendent, shall enter on its books its real estate and the

building or buildings thereon, or its fixtures, vaults, furniture and

equipment, at a valuation exceeding its actual cost to such savings

bank, or carry such real estate, building or buildings, fixtures,

vaults, furniture or equipment at a valuation exceeding the actual cost

less appropriate allowance for depreciation. No adjustment for

depreciation shall be required to be made on the books except when the

books are closed for the purpose of computing net earnings.

4. Real estate acquired by a savings bank, other than that acquired

for use as a place of business, shall be entered on the books of the

savings bank in conformity with the method of accounting for troubled

debt restructurings approved by the financial accounting standards board

or such other method of accounting as may be authorized or required by

rules and regulations of the superintendent of financial services.

The provisions of this subdivision shall not, except as the

superintendent may otherwise require, apply to any parcel of real estate

as to which the savings bank has exercised its option to transfer or

convey such real estate to the veterans administration or the federal

housing commissioner pursuant to insurance or guaranty.

5. The superintendent may disallow the book value of any assets in

whole or in part. In such event the savings bank shall reduce the value

at which such assets are carried on its books to the value allowed by

the superintendent, or, if the written approval of the superintendent is

first obtained, may allocate a reserve for the valuation of such assets.