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Tag >> Accounting
Apr 28

Why corporate users of derivatives should favor reform

Posted by Ron F in RiskRegulationGoldman Sachsfinancial crisisfailurederivativescredit-default swapcost of capitalcorporate treasurersCFObanking reformbailoutsAIGAccounting

Ron F

It's hard to see why CFOs who want to use derivatives to hedge risk would oppose efforts to improve the transparency and collateral backing swap trades. But according to this New York Times article, such opposition persists.

As we reported last week, however, proposals to require trading of standardized derivatives through exchanges or at least settle the transactions through central clearinghouses would require counterparties to post more collateral but mitigate, at minimum, any increase in cost through narrower spreads between bid and asked prices.

Apr 27

More hype about a bellwether's results

Posted by Ron F in unemploymentjobsjoblessnesshealth careGeneral ElectricGEemploymenteconomycost reductionconsumer spendingconstructionChinaCareers/ManagementbubblesAccounting

Ron F

By this point, press cheerleading for the economy is hardly newsworthy, and I'm not the first to notice the latest example.

But the down-is-up spin on Caterpillar's results cannot escape mention.  As the Business Insider notes, the Bloomberg story is tame by comparison with the ravings on CNBC yesterday.

Apr 24

Accounting firms pinching pennies, too

Posted by Going Concern in Feescareer/managementauditorsAccounting

Going Concern

Submitted by Daniel Braddock, republished from Going Concern, Accounting News for Accountants and CFOs.

Because times weren't already cheerful enough around Grant Thornton, they recently released a study that found businesses are generally pessimistic about raises and bonuses this year.

Apr 21

Shedding no further light on Lehman

Posted by Ron F in Securities and Exchange CommissionRiskRepo 105RegulationNew York FedLehman BrothersGeithnerGAAPfinancial crisisFederal ReserveFedCongresscomplianceBernankeBarney FrankBanksbank failuresbailoutsAccounting

Ron F

I have to say that today's House Financial Services Committee hearing into Lehman Brothers' collapse leaves me confused in more than one respect.

Ben Bernanke told the committee that regulatory authority over Lehman rested with the Securities and Exchange Commission under a voluntary program set up in 2004.

Apr 21

FASB offers little more than guidance on repo transactions

Posted by Going Concern in repoLehman BrothersFASBcomplianceAccounting

Going Concern

Submitted by Adrienne Gonzalez, republished from Going Concern, Accounting News for Accountants and CFOs.

It's not surprising that FASB's Bob Herz was called to submit comment on the House Financial Services Committee's hearings on Lehman - more specifically, Public Policy Issues Raised by the Report of the Lehman Bankruptcy Examiner - and it's even less surprising that Herz stated that the FASB will be ready when the SEC is to alter repo accounting rules should this be, you know, a big deal going forward.

Apr 16

Another case of "What are auditors for, anyway?"

Posted by Going Concern in Securities and Exchange CommissionPwCPricewaterhouseCoopersCPAscomplianceauditorsauditingAccountingaccountants

Going Concern

Submitted by Caleb Newquist, republished from Going Concern, Accounting News for Accountants and CFOs.

Last week, the SEC continued its "Bustin' Up Fraud" tour by charging Memphis-based Morgan Keegan & Company, Morgan Asset Management, and two employees, James C. Kelsoe, Jr. and Joseph Thompson Weller with "fraudulently overstating the value of securities backed by subprime mortgages."

Apr 15

Lehman's arrangement with Hudson Castle may have violated GAAP

Posted by Ron F in Lehman BrothersGAAPFASBErnst & YoungcomplianceCitigroupbank failuresAccounting

Ron F

I'm far from the only person having a hard time understanding the significance of the deals arranged by a company that this page one New York Times story referred to as Lehman Brothers' "alter ego."

From the looks of it, the company in question, called Hudson Castle, was set up simply to serve in the traditional role of outside investor in another company's off-balance-sheet financing vehicle, which is known as a special purpose or variable interest entity in the accounting world, and a conduit or structured investment vehicle in the world of banks.

Apr 12

Will private companies finally get their own accounting rules?

Posted by mcole in IFRSGAAPcomplianceAccounting


A blue ribbon panel on private company accounting is holding its inaugural meeting Monday, to assess how financial reporting standards can best meet the needs of users of US private company financial statements, which are mostly for bankers and other types of lenders.

The panel, formed by the Financial Accounting Foundation, the American Institute of Certified Public Accountants and the National Association of State Boards of Accountancy, will meet five times throughout the year and will issue a report with recommendations on the future of standard setting for private companies by the end of the year.

Apr 09

Banks' balance sheet maneuvers aren't limited to Lehman-like moves

Posted by Ron F in RiskRepo 105RegulationLehman BrothersGoldman SachsdebtcomplianceBanksbanking industryBankingAccounting

Ron F

This article on the balance sheet maneuvers of 18 banks obscures the difference between risk taking and accounting for it.

For starters, the findings don't show that banks are moving a lot of debt off their balance sheets a few days before quarter's end, and moving it back on afterward, the way Lehman Brothers did through short-term financing arrangements involving repurchase agreements treated as "sales."

Apr 09

How the heck is PwC still AIG’s auditor?

Posted by Going Concern in PricewaterhouseCoopersfinancial reportingcomplianceauditAIGAccounting

Going Concern

Submitted by Francine McKenna, republished from Going Concern, Accounting News for Accountants and CFOs.

The US Federal government has been propping up AIG with hundreds of billions of dollars and AIG has been, in turn, protecting its auditor, PricewaterhouseCoopers (PwC).

PwC continues to be AIG's auditor.

Unfortunately for all of them, former AIG Financial Products head, Joe Cassano, is off the reservation and worried more about his own scalp. After two years of negotiations with the Department of Justice, it looks like he won't be criminally prosecuted for hiding risks from investors or lying at a December 2007 investor conference.

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