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).
None of his companies is listed?except for a small copper-and-gold play in which he holds a small stake?and valuing assets such as real estate and undeveloped mining properties in Mongolia is more than tricky.
Are the general partners of alternative investment funds subject to a conflict of interest in valuing partnership assets?
FORBES: 22 Tough Questions For Rhode Island's Pension 'Reform' Treasurer
Even Nomura, whose business is valuing financial assets, fell into the valuation trap.
Another example: investment bankers advising merging companies need not explain the nitty- gritty of how they are valuing certain assets.
Valuing the assets involves finding estimates for similar stuff in the market.
"We continue to believe that the private market is way ahead in properly valuing newspaper assets versus current public newspaper multiples, " he wrote.
In October the SEC sued Southridge Capital Management and its manager, Hicks, accusing them of committing fraud in valuing portfolio assets, making misrepresentations to investors and misusing investor assets.
FORBES: Billionaire Leon Cooperman Has Cash Stuck In Controversial Hedge Fund
The first is to be conservative when valuing the assets that will go into the bad bank, even if this imposes steeper losses on the banks handing them over.
ECONOMIST: ��Bad banks�� seldom turn a profit but are still useful
To work our way out of the current morass, it will be necessary to relax the mark-to-market rules for banks on valuing the assets that need to be taken off of their balance sheets.
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).
It could also develop a professional and uniform approach to valuing and disposing of bad assets while leaving new lending decisions to the good banks.
The issue of valuing hard-to-value assets has hovered over all sorts of investment funds holding illiquid assets ever since the credit crisis hit financial markets.
FORBES: Will SEC's Settlement In Valuation Case Be Part Of A Trend?
At a late stage Mr Geithner rejected the idea of a government-run bad bank (as well as blanket guarantees for noxious assets), put off by the high upfront cost and the problems it would have valuing the debt.
Hedge funds may not be valuing their portfolios correctly and the truth will only emerge when they are forced to sell assets to meet the redemptions of clients' holdings.
ECONOMIST: Despite mixed results, hedge funds earn a little respect
Markets were obscenely high in the first quarter of the year, valuing companies that sometimes owned little more than an idea higher than companies with real products, assets and a history of profits.
应用推荐