Author: Publisher:
ISBN:
Category :
Languages : en
Pages :
Book Description
Recession of FASB Statement
Author: Amendment to FASB Statement No. 66, Recession of FASB Statement No. 75, and Technical Corrections
Author: Accounting discretion of banks during a financial crisis
Author: Mr.Luc LaevenPublisher: International Monetary Fund
ISBN: 1451873549
Category : Business & Economics
Languages : en
Pages : 43
Book Description
This paper shows that banks use accounting discretion to overstate the value of distressed assets. Banks' balance sheets overvalue real estate-related assets compared to the market value of these assets, especially during the U.S. mortgage crisis. Share prices of banks with large exposure to mortgage-backed securities also react favorably to recent changes in accounting rules that relax fair-value accounting, and these banks provision less for bad loans. Furthermore, distressed banks use discretion in the classification of mortgage-backed securities to inflate their books. Our results indicate that banks' balance sheets offer a distorted view of the financial health of the banks.
FASB's Failure to Regulate Off-Balance Sheet Special-Purpose Entities and the Downfall of Securitization
Author: Charles J. AbramsPublisher:
ISBN:
Category :
Languages : en
Pages : 36
Book Description
Corporate off-balance sheet transactions that used special-purpose entities (“SPEs”) facilitated the expansion of structured finance during the years leading up to the Great Recession. Specifically, SPEs conferred bankruptcy remote, liquidity, leverage and interest rate risk benefits on their sponsors, resulting in the growth of securitization and the asset-backed commercial paper markets. To obtain these benefits, sponsor firms needed to avoid recognizing SPEs' assets and liabilities on their balance sheets. This avoidance depended on whether the accounting rules treated the transfer of assets between a sponsor and its SPE as a true sale or a loan.The Financial Accounting Standards Board's (“FASB”) deficient accounting rules that governed the true sale treatment between SPEs and their sponsoring firms increased the information asymmetries, over-leveraging and risk-retention problems that flowed through the securitization pipeline and shadow banking system. This article first provides a description of FASB's changes to the true sale and consolidation rules of SPEs prior to the Great Recession. It then shows that FASB's rules failed to appropriately regulate SPEs in two ways: first, FASB created a flawed concept known as a qualified special-purpose entity (“QSPE”). By meeting a few requirements, sponsors could set-up QSPEs, which automatically received true sale treatment. FASB's rules allowed sponsors to retain residual interests in their QSPEs without simultaneously accounting for the risks on their financial statements. Second, FASB failed to address the well-known problem of sponsor firms providing implicit recourse for their off-balance sheet SPEs. When the recession surfaced and numerous SPEs began collapsing, many financial institutions chose to honor their implicit recourse agreements and bailout their failing SPEs. This resulted in significant unaccounted for losses to sponsor firms. The article proceeds by explaining the ramifications of FASB's failure and concludes by discussing recent remedial actions.
The Role of the Accounting Profession in Preventing Another Financial Crisis
Author: United States. Congress. Senate. Committee on Banking, Housing, and Urban Affairs. Subcommittee on Securities, Insurance, and InvestmentPublisher:
ISBN:
Category : Business & Economics
Languages : en
Pages : 268
Book Description
Financial Reporting Handbook
Author: Michael R. YoungPublisher: Aspen Publishers Online
ISBN: 0735546029
Category : Business & Economics
Languages : en
Pages : 1824
Book Description
Never before has a single reference provided such quick access to every critical aspect of financial reporting. In addition to covering the new Sarbanes-Oxley legislation, SEC rules and regulations, and corporate governance standards promulgated by the Independence Standards Board and the AICPA at institutions such as New York Stock Exchange, NASDAQ, and the American Stock Exchange, the Financial Reporting Handbook tackles important underlying themes such as the centrality of the audit committee, the individual responsibility of executives, and the integrity of the outside auditor. Best of all, the Financial Reporting Handbook will be updated every quarter with the relevant laws and regulations that are developed and implemented.
CCH Accounting for Business Combinations, Goodwill, and Other Intangible Assets
Author: Benjamin S. NeuhausenPublisher: CCH
ISBN: 9780808091134
Category : Business & Economics
Languages : en
Pages : 548
Book Description
CCH Accounting for Business Combinations, Goodwill, and Other Intangible Assets offers practical guidance on accounting for business combinations, as well as intangible assets and goodwill under both U.S. and international accounting standards. It covers a broad range of transactions, including: acquisitions of businesses by acquiring assets or stock; acquisitions of minority interests; leveraged buyouts; reverse acquisitions; rollup transactions; and transfers and exchanges between companies under common control. This comprehensive resource draws on a variety of accounting literature to amplify the text of FASB Statements No. 141, Business Combinations, and No. 142, Goodwill and Other Intangible Assets, for U.S. standards, and International Financial Reporting Standard 3, Business Combinations, and International Accounting Standard 38, Intangible Assets, for international standards, as issued by the International Accounting Standards Board.
Hidden Financial Risk
Author: J. Edward KetzPublisher: John Wiley & Sons
ISBN: 0471468479
Category : Business & Economics
Languages : en
Pages : 314
Book Description
An insider's guide to understanding and eliminating accounting fraud How do these high-profile accounting scandals occur and what could have been done to prevent them. Hidden Financial Risk fills that void by examining methods for off balance sheet accounting, with a particular emphasis on special purpose entities (SPE), the accounting ruse of choice at Enron and other beleaguered companies. J. Edward Ketz identifies the incentives for managers to deceive investors and creditors about financial risk and also shows investors how to protect their investments in a world filled with accounting and auditing frauds. J. Edward Ketz, PhD (State College, PA) is MBA Faculty Director and Associate Professor of Accounting at Penn State's Smeal College of Business. He has been cited in the press nearly 300 times since Enron's bankruptcy, including The New York Times, The Wall Street Journal, and The Washington Post.. He has a regular column in Accounting Today.
Institutions in Crisis
Author: David HowdenPublisher: Edward Elgar Publishing
ISBN: 0857932128
Category : Business & Economics
Languages : en
Pages : 265
Book Description
'An important and timely contribution. David Howden has brought together an excellent collection of essays which go beyond the theoretical discussion of Austrian business cycle theory, exploring instead its empirical relevance to one of the most serious financial crises in modern European history.' – Mark Pennington, Queen Mary, University of London, UK 'This is an important and refreshing book which provides an approach of current problems quite different from what is (too often) written. In my opinion it is the only correct analysis of the economic crisis and of European problems. In spite of the diversity both of contributors and topics, a common and rigorous intellectual foundation gives unity and strength to this book. It offers the clues for the best understanding of present and future economic problems.' – Pascal Salin, Emeritus Professor of Economics, University Paris-Dauphine, France 'The current European recession is being offered as an excuse for a wider, more expansive centralized Europe. Failure to recognize the true causes of the recession – failed institutions that have plagued Europe for years, and will continue to do so if permitted to continue – will prolong the current malaise, and hold Europe back from its new future. Let us hope that the current volume does much to bring this new Europe to us.' – From the foreword by Jesús Huerta de Soto This critical and thought-provoking book explores the causes and consequences of Europe's failed political and economic institutions. Europe's recession has created new challenges as market turmoil has shaken the foundations of the twin pillars of the new drive for European integration – political and monetary unions. This book critically assesses the patchwork solutions continually offered to hold the troubled unions together. Failed political policies, from the prodigious 'Common Agricultural Policy' to ever more common fiscal stimulus packages, are shown to have bred less than stellar results in the past, and to have devastating implications for future European growth. The contributors outline the manner through which European monetary union has subsidized and continues to exacerbate the burgeoning debt crisis. Most strikingly, the interplay between Europe's political and economic realms is exposed as the boondoggle it is, with increasingly bureaucratic institutions plaguing the continent and endangering future potential. Combining political and economic analysis, this comprehensive book will prove essential for researchers and students in international business and macroeconomics. Educated laymen wanting a keener perspective on Europe's recession will also find this book to be invaluable.
Hidden in Plain Sight
Author: Peter J. WallisonPublisher: Encounter Books
ISBN: 159403866X
Category : Business & Economics
Languages : en
Pages : 331
Book Description
The 2008 financial crisis—like the Great Depression—was a world-historical event. What caused it will be debated for years, if not generations. The conventional narrative is that the financial crisis was caused by Wall Street greed and insufficient regulation of the financial system. That narrative produced the Dodd-Frank Act, the most comprehensive financial-system regulation since the New Deal. There is evidence, however, that the Dodd-Frank Act has slowed the recovery from the recession. If insufficient regulation caused the financial crisis, then the Dodd-Frank Act will never be modified or repealed; proponents will argue that doing so will cause another crisis. A competing narrative about what caused the financial crisis has received little attention. This view, which is accepted by almost all Republicans in Congress and most conservatives, contends that the crisis was caused by government housing policies. This book extensively documents this view. For example, it shows that in June 2008, before the crisis, 58 percent of all US mortgages were subprime or other low-quality mortgages. Of these, 76 percent were on the books of government agencies such as Fannie Mae and Freddie Mac. When these mortgages defaulted in 2007 and 2008, they drove down housing prices and weakened banks and other mortgage holders, causing the crisis. After this book is published, no one will be able to claim that the financial crisis was caused by insufficient regulation, or defend Dodd-Frank, without coming to terms with the data this book contains.