The revelations that sparked the crisis in October, about off-balance sheet partnerships, accounting restatements and an investigation by the Securities and Exchange Commission, were embarrassing, certainly.
However, evidence emerged in the Andersen trial that Mr Fastow had rejected a particular accounting treatment for some of the off-balance sheet partnerships, adopting instead something that did not conform with American accounting rules.
With the market value plummeting, he argued, mark-to-market accounting turned AIG's balance sheet into a nightmare.
She struggled with the basics, such as how to read a balance sheet, even going so far as buying Accounting for Dummies.
The differences between an operating lease and a capital lease are quite small despite the rather large impact the difference in accounting can have on the balance sheet and economic earnings of the business.
FORBES: Off-Balance Sheet Debt: Bad Enough That FASB Notices, Maybe You Should Too?
Unlike the opaque Lehman, MF Global fully disclosed the trades and their accounting treatment including the off-balance sheet effect.
FORBES: Uncontrolled Risk Taking, Not Bad Accounting, Did MF Global In
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.
During the meeting, Hulse passed around a memo, disclosing that PwC had erred in approving the accounting treatment for the off-balance sheet entities, the suit says.
In countries like Great Britain and Australia that use similar accounting standards, brands are sometimes put on the balance sheet, their worth determined independently.
The accounting rules allow companies to move debt off their balance sheet by employing operating leases instead of capital leases to account for certain assets.
FORBES: Off-Balance Sheet Debt: Bad Enough That FASB Notices, Maybe You Should Too?
Accounting scandals at Enron and Arthur Andersen sparked more balance-sheet scrutiny.
Amongst many other weaknesses, they never have enough competent accounting professionals to book the complex transactions it takes to create their balance sheet.
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.
The Federal Accounting Standards Board is considering new rules about how financial companies account for off-balance sheet holdings.
New Constructs includes off-balance sheet debt in all of its reports and adjusts the reported earnings of all companies for this misleading accounting practice.
FORBES: Off-Balance Sheet Debt: Bad Enough That FASB Notices, Maybe You Should Too?
In countries that use similar accounting standards, such as Great Britain and Australia, brands are sometimes put on the balance sheet, their worth determined independently.
PwC came to this conclusion after consulting with three of the other big accounting firms and each firm indicated that the unit didn't qualify for off-balance sheet treatment, the suit says.
The accounting standards for both these trades and repo-to-maturity trades allowed off-balance-sheet treatment.
FORBES: Uncontrolled Risk Taking, Not Bad Accounting, Did MF Global In
应用推荐