Wall Street has been moving billions of assets into a relatively new accounting category called "level 3, " a designation that the fair value of those assets, including subprime mortgages and derivatives, couldn't be determined because there was no observable market for them.
Moreover, accounting experts whose opinions I know and trust have suggested that the next wave of accounting inquiries may involve fair value accounting for assets and liabilities.
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Companies must engage in regular accounting of digital assets and assessment of potential security flaws.
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Business valuation is supposed to be a mathematical calculation of revenue streams, assets and liabilities, simple accounting stuff.
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He will also have to deal with subprime-linked lawsuits and a regulatory investigation of Merrill's accounting for illiquid assets.
Under present accounting rules, assets have to be priced at tradable prices.
And mark-to-market accounting meant that banks were valuing illiquid assets at prices which reflected a lack of buyers as much as underlying credit quality (accounting-standards bodies have since been bullied into allowing bankers to exercise more judgment in how they classify and value such assets).
Raynes' side believes an accounting might reveal more assets.
Beware insurance companies that are licensed in lightly regulated jurisdictions, and make sure that those that you deal with have verifiable assets and verifiable audits from major accounting firms (and call the audit partner to verify that they actually were engaged to do the audit).
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Meanwhile, there is a trend in accounting standards away from valuing assets at historic cost (ie, what they cost to buy) towards fair value (ie, what they would fetch if sold).
Traders are intensely focused on level 3 reported by the banks, because new accounting rules changing the way assets are valued kick in later this month and could fuel a new wave of write-downs.
But a lawsuit filed in 2004 by a federal bankruptcy trustee in Alabama alleges that the joint venture kept no accounting records, had few assets, held no board meetings and routinely diverted sales to Terry and Cintas.
The accounting rules do allow you to designate assets as being held to maturity, or being held in the short-term.
Accounting rules urge firms to write down such assets as soon as they realize they will not collect.
The Powershares ETF is very well-diversified with the Top 10 holdings only accounting for about 25% of the funds assets.
Even those banks that are in good shape may want to hold back amid uncertainty over capital-adequacy requirements and accounting rules for off-balance-sheet assets.
They do not have the safety-valve of banking books, where souring assets can escape the rigours of mark-to-market accounting.
Andrew Smithers, a London-based economist, put out a report late last year indicating that if Japanese life insurers were held to U.S. or British accounting standards, their collective liabilities would exceed their assets.
The agency is gathering information from 11 major banks about their activities involving repos, an accounting technique that Lehman used to move billions of assets off its balance sheet each quarter end, and which the examiner claims deliberately masked the true nature of its leverage.
Widening borrowing costs, accounting rules that forced the bank to write down its assets, and rating agency downgrades that all conspired to hobble Lehman.
That might sound like an accounting nicety, but the level of tangible versus intangible assets can impact important things like the satisfying of loan covenants.
But the numbers were complicated by a dizzying array of accounting gains and losses for tax credits and devaluation of European assets.
Even if they could, basic accounting requires new capital to fill the hole left by the departing assets.
At present, the American industry still dwarfs all others, accounting for over half of the world's mutual-fund assets.
Developers are a big chunk of the economy-accounting for 33% of total investment in China's fixed assets last year.
One of the problems is the still-opaque process the banks use to evaluate and mark securities holdings, loans and other assets to market, a process they have to repeat daily because of new accounting rules.
Foreign banks have long targeted China as a key market for future growth, but they are still niche players, accounting for less than 2% of the banking sector's total assets, according to the KPMG report.
Testifying before Congress last week, FASB chairman Robert Herz noted the virtues of such "fair value" accounting, which allow investors to evaluate the worth of a company and its assets without relying solely on the company's estimates.
Accounting standard-setters have been arm-twisted into relaxing rules that force banks to mark certain assets to market, but in the long run that may hurt confidence in the health of bank balance-sheets, not help it.
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Operating under guidance from the Government Accounting Standards Board, public plans discount future liabilities at a rate equal to their expected return on assets--which, for the 59 plans in our study, was typically close to 8%.
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