Posts tagged 'GAAP'

Beancounters, having resolved not to resolve differences in derivatives netting, instead have cool new footnotes

Netting of the mark-to-market of derivatives positions is attractive. It’s more efficient when it comes to posting and receiving margin, decreasing the amount of operational and counterparty risk. The ultimate in netting efficiency is, of course, the newest too-big-to-fail institutions — central counterparties (CCPs) and clearinghouses.

There’s another place where offsetting positions is attractive: financial statements. It can make a big difference. Citi demonstrates this with estimates of what derivatives exposures (including repos, brokerage receivables, and associated collateral) would look like if you applied full netting instead of that dictated by respective accounting standards… Read more

Dupe de Group(on) – some very special accounting

You gotta love new accounting principles — especially ones drummed up by IPO-ing tech firms.

From Groupon’s S-1 filingRead more

Choose your own MBS accounting

Basel III. Accounting. Mortgage-Backed Securities. Yawn.

But wait — Basel III’s attempt to incentivise banks into managing their interest rate risk could be about to permanently alter the way banks handle some $1,480bn worth of MBS, or 11 per cent of their assets. Read more

Accounting for Egg

Compare and contrast Tuesday’s statements from Barclays and Citigroup on the sale of the Egg UK credit card portfolio.

First, BarclaysRead more

2011 is the year of accounting ‘condorsement,’ Fitch says

This is meant to be the year of accounting convergence.

You’re probably already yawning by now — but wait! This is important. Read more