Entries tagged "writedowns"
Moody's is predicting another $470 billion in losses and write-downs for U.S. banks by 2010.
Investors in private equity have plenty to grouse about, if the recent write-downs from publicly quoted buyout portfolios are early indicators. But how deep those write-downs will be for everyone remains a matter of conjecture, thanks to an accounting approach generally known as "option value." Private equity funds' fourth-quarter and end-year results, typically due out in March, are being closely watched because 2008 is the first full year to reflect the impact of new mark-to-market rules under Financial Accounting Standards No. 157, which defined how to measure fair value. This is a free preview of the content available in...
Private equity firms may be feeling a bit like Al Capone nowadays (without all that criminal activity of course), as it won't be rivals or law enforcement that ensnare them, but their own sharp-penciled accountants. Thanks to the magic of mark-to-market accounting rules, LBO shops are preparing to give their limited partners the bad news of just how much those portfolio companies they bought in the boom years are worth during a credit crisis and recession. ...
With the balance sheets of banks under siege from write-downs related to mortgage-backed assets that no one wants, the Securities and Exchange Commission and the Financial Accounting Standards Board issued guidance reminding auditors that fair value rules don't require them to only use markets to determine the worth of their assets. In fact, if there's no functioning market, says the SEC, firms can use their expectations of future cash flow to gauge values....
