The above example is related to venture capital accounting, but the foremost area of concern relates to public company reporting as that affects significantly more investors.
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But there would probably be only a limited impact on capital because accounting rules give banks wide latitude in calculating the net present value of the bonds, enabling them to reduce the hit they would take to capital.
Both channels need to have the proper balance of capital invested in accounting and compliance relative to the market they serve.
McCAIN: Our financial market approach should include encouraging increased capital in financial institutions by removing regulatory accounting and tax impediments to raising capital.
The Treasury bought preferred stock in over 700 banks to give them an additional capital cushion, while mortgage backed securities and mark to market accounting were wiping bank capital out.
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Tech and pharma generally, have been earning strong profits over the last two decades, even though they have very little capital according to traditional accounting.
Even if they could, basic accounting requires new capital to fill the hole left by the departing assets.
Finally, FASB made market-to-market accounting a regulatory capital requirement in November 2007.
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.
That means that even though CHK may be reporting positive accounting earnings, capital expenditures for lease acquisitions and drilling are greater than stated net income.
The top stock in the fund is Annaly Capital Management ( NLY) accounting for more than 20% of the fund, followed by Chimera Investment Corportation ( CIM) accounting for about 11% of the fund.
Under partnership accounting, the capital gain must be allocated to the partners and it is perfectly legal (after the limited partners have recouped their investment) to allocate the capital gain dis-proportionally to the general partner and limited partners according to the partnership agreement.
As to late-fee income, Capital One seeks to retroactively change accounting methods years after it selected and implemented an alternative method.
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Without sound capital markets, regulatory regimes, and accounting standards, privatisation could simply increase incentives to cheat.
Glas Cymru's proposals will cut Welsh Water's cost of capital, its single biggest cost (accounting for a third of customers' bills).
By the end of the period and after accounting for inflation, the capital budget will be half what it was two years ago.
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Before Wednesday, he was largely unknown, mentioned in passing in one or two news reports as having sent an e-mail to Myers confirming that WorldCom's accounting for ordinary expenses as capital expenditures could not be justified.
The current-account deficit is no more than the accounting counterpart of that net inflow of capital.
This study claims it is subconscious mental accounting, whereby investors view dividends and capital gains in two completely separate buckets.
Alt indicators at current prices, including changes in inventories and consumption of fixed capital, are valued at average prices of the accounting period.
Because all banks except Bank of Tokyo-Mitsubishi have now chosen historical cost accounting, however, all will report capital levels greater than the 8% minimum.
In 2008 and 2009 I probably wrote more than anything else about needlessly destroying bank capital with a strict application of mark to market accounting.
Panelists are expected to address the impact of accounting standards reform on the raising of capital raising as well as on U.S. investors and lenders.
Enforcement will be the real challenge, assuming that all the cumbersome legislation goes forward on financial conglomerates, pensions, new capital-adequacy rules, risk capital for small businesses, clearing and settlement, accounting standards and insolvency rules.
And as the bloggers at Naked Capitalism point out, the Basel committee focused on setting capital levels but did not address liquidity standards or accounting, two other crucial issues facing the banking industry.
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Still, HSBC insists that the charge is a "pure accounting item" that will not affect its capital base.
With loan demand from creditworthy borrowers weak during the recession and with banks still suffering from the financial crisis, perverse accounting rules that caused them to lose regulatory capital, and persistent banker bashing from the Administration and Congress, many banks held onto their reserves to cushion further capital losses.
The most significant changes, of course, involve Fannie and Freddie, which just five months ago were still subject to 30% capital surplus requirements, a punishment of sorts for their accounting scandals earlier in the decade. (Those surplus limits were lowered to 20% in March in order to marshal the companies' aid in dealing with the mortgage crisis).
If a unit has relatively risky systems, controls and accounting procedures, more of the company's capital will be allocated to it which will lower the return that unit will earn on a given amount of profit.
Whereas the accounts of firms such as Berkshire Hathaway, headed by a guru of the old economy, Warren Buffett, are required by American accounting rules to record their tax liabilities alongside their capital gains, those of Softbank are silent.
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