Comments on: James Hamilton on Credit Crunches, Bank Runs, and Regulation http://www.nakedcapitalism.com/2007/09/james-hamilton-on-credit-crunches-bank.html Sat, 21 Nov 2009 21:45:47 -0500 http://wordpress.org/?v=2.8.4 hourly 1 By: Anonymous http://www.nakedcapitalism.com/2007/09/james-hamilton-on-credit-crunches-bank.html#comment-1668 Anonymous Thu, 15 Nov 2007 02:39:00 +0000 http://www.nakedcapitalism.com/2007/09/james-hamilton-on-credit-crunches-bank-runs-and-regulation/#comment-1668 How humilating yo be an American these days; so much corruption and collusion!<br/><br/>Re: November 14, 2007<br/><br/>The Financial Accounting Standards Board voted to defer the implementation date of FAS 157, its rule for how to mark to market assets and liabilities, for all non-financial items except for those already reported at fair value on a recurring basis. <br/><br/>The accounting standard, which FASB voted not to entirely defer last month, goes into effect for all companies starting tomorrow. It articulates a new framework for determining fair-value measurements of assets and liabilities, though it does not require that such measurements be made in any new areas. Many financial companies adopted the standard earlier this year and have struggled to implement it because of the tumultuous credit markets. The standard requires companies to maximize the use of observable market prices and inputs, and minimize the use of unobservable inputs in their valuations. <br/><br/>The standard also presents challenges for non-financial assets and liabilities—most notably in the context of business combinations when companies have to fair value the assets and liabilities they acquire. “The most prevalent areas that would be affected by a partial deferral would be in regard to business combinations and impairments of acquired assets,” said FASB practice fellow Brian Stevens last week.<br/><br/>Some observers questioned the decision. “It’s a little puzzling that [FASB] did so at all in that companies will still have to apply 157 to problem financial assets, which is a good thing, whereas the non-financial assets get the deferral,” said Jack Ciesielski, an analyst and principal in the firm of R.G. Associates.<br/><br/>Given that FASB intends to change the rules on accounting for business combinations, the board appears to have decided that the new valuation rules should wait until those changes are implemented How humilating yo be an American these days; so much corruption and collusion!

Re: November 14, 2007

The Financial Accounting Standards Board voted to defer the implementation date of FAS 157, its rule for how to mark to market assets and liabilities, for all non-financial items except for those already reported at fair value on a recurring basis.

The accounting standard, which FASB voted not to entirely defer last month, goes into effect for all companies starting tomorrow. It articulates a new framework for determining fair-value measurements of assets and liabilities, though it does not require that such measurements be made in any new areas. Many financial companies adopted the standard earlier this year and have struggled to implement it because of the tumultuous credit markets. The standard requires companies to maximize the use of observable market prices and inputs, and minimize the use of unobservable inputs in their valuations.

The standard also presents challenges for non-financial assets and liabilities—most notably in the context of business combinations when companies have to fair value the assets and liabilities they acquire. “The most prevalent areas that would be affected by a partial deferral would be in regard to business combinations and impairments of acquired assets,” said FASB practice fellow Brian Stevens last week.

Some observers questioned the decision. “It’s a little puzzling that [FASB] did so at all in that companies will still have to apply 157 to problem financial assets, which is a good thing, whereas the non-financial assets get the deferral,” said Jack Ciesielski, an analyst and principal in the firm of R.G. Associates.

Given that FASB intends to change the rules on accounting for business combinations, the board appears to have decided that the new valuation rules should wait until those changes are implemented

]]> By: EEngineer http://www.nakedcapitalism.com/2007/09/james-hamilton-on-credit-crunches-bank.html#comment-676 EEngineer Sun, 02 Sep 2007 05:36:00 +0000 http://www.nakedcapitalism.com/2007/09/james-hamilton-on-credit-crunches-bank-runs-and-regulation/#comment-676 It's refreshing to see someone give the folks running the show an unvarnished account of the situation. Dry and clinical perhaps, but correct none the less. It sounds like an autopsy report actually. The last paragraph in particular gives me the impression that the author believes that some in the audience haven't noticed that the incoming wave is a tsunami. It’s refreshing to see someone give the folks running the show an unvarnished account of the situation. Dry and clinical perhaps, but correct none the less. It sounds like an autopsy report actually. The last paragraph in particular gives me the impression that the author believes that some in the audience haven’t noticed that the incoming wave is a tsunami.

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