All GLG News Analyses Filed Under: Accounting Issues

Paul MillerProfessorREGENTS OF THE UNIVERSITY OF COLORADO

Is it bad reporting or does naivete reign at the highest levels?

August 7, 2008

Analysis of:Mulling the Fair Value, Historic Cost Choice | www.cfo.com

Maybe it's just me, but these quotes from Herz and Pozen are off-base. When they suggest there could be a pure historical cost system, they are talking about something that doesn't exist and hasn't existed in a 100 years, if even then. I have to believe that Herz was misquoted or misinterpreted; I can believe that Pozen would misunderstand. Nothing will come out of this. There will be no turning back to more costs. There will be a continuing progression toward fair value accounting for the simple reason that it produces the information that users want and that society needs them to have.undefined undefined

Nitish GroverPrincipal, OwnerNitish Grover and Associates

Fair Value vs Historical Cost - A Look at some Aspects of the Debate

August 4, 2008

Analysis of:Mulling the Fair Value, Historic Cost Choice | www.cfo.com

The  debate  on  the  use  of  fair value  seems  to  get  more  complicated  with  each  passing  day. Also  the  use  of  fair  value  for  some  balance  sheet  items  and  for  historical  cost  for  other  items  simply  complicates  the  way  in  which  financial  information  is  presented.The  FASB has  now  prepared  a  report  which  recommends  that  fair value/historical  cost be  used  consistently  for  a  particular  business activity. In  my  opinion  this  only  complicates  the  issue  without  simplifying  anything  and  I  look  at  the  same  in  this  analysis.

Nitish GroverPrincipal, OwnerNitish Grover and Associates

Economic Recession, WTO, Fair Value and Accounting Restatements - The Coming Conundrums

July 21, 2008

Analysis of:Fed Chief Bleak on Economic Outlook | www.nytimes.com

The  global  economy  is  today caught  in  a  quagmire. The  WTO  talks  are  stumbling. Securities  markets  don't  know  which  way to  go. Each  day comes  with  a  new  piece  of  news  which  is  difficult  to  fit  in  the  jigsaw. Economic  recession  with  inflation  has  hit  several  parts  of  the  globe. The  problems  of  Fannie  Mae  and  Freddie Mac  are  the  latest  to  hit  the  headlines. In  this  analysis  I  take  a  look  at  how  these  events  are  reshaping  accounting  and  why  we  can expect  further  confusion  in  accounting  statements.

Excesses y Consequences

July 18, 2008

Analysis by: GLG Expert Contributor

Analysis of:Fed Chief Bleak on Economic Outlook | www.nytimes.com

Bring government spending under control, avoiding a steady collapse of the government's financial house. Impose stricter regulations and closer risk controls on financial institutions. Banking must return to a higher standard of ethical behaviour to ease crisis of confidence.

Nitish GroverPrincipal, OwnerNitish Grover and Associates

Convergence of Accounting Standards - Good, Bad or Ugly?

July 1, 2008

Analysis of:FASB Agenda Takes on Global Spin | www.cfo.com

A  lot  has  been  written  about  the  convergence  of  accounting  standards over  the  last  few  years. The  bandwagon  also  moves  on. There  are  however  major  stumbling  blocks. In  this  analysis  I  look  at  whether  Convergence  will  be  good, bad  or  ugly?

Fair Value Accounting and Reporting as Messenger of Truth

June 23, 2008

Analysis by: GLG Expert Contributor

Analysis of:The Role of Fair Value in the Subprime Mortgage Metltdown | www.aicpa.org

The requirements for pricing securities from active external market transactions for prompt reporting to management and investors reflect the internet speed and transparency required for continuing national prosperity in the round the clock world of finance. Absent Fair Value Accounting standards, the delayed or deferred recognition of market losses allows investors to continue believe valuations where the assets are not available to meet obligations. The promises made to holders of life insurance policies, pension benefits, annuities, mutual funds and various investment pooled entities require prompt realizable valuation to have funds available when promised and maintain public confidence in the securities markets.

Nitish GroverPrincipal, OwnerNitish Grover and Associates

SFAS 133 - CDO - Subprime Crisis - Accounting Changes - Can accounting be less complicated than its instruments?

June 18, 2008

Analysis of:Hedge Accounting : Caging the 800 page gorilla | www.cfo.com

The FASB proposes  to  do  a  complete  revamp of  SFAS 133 and all  the  associated baggage  that  goes  with  it. The standard itself is so  complicated  that  I wonder  if  it  can  really  be  revamped. In this analysis I  look  at  whether accounting  can  be  less complicated  than  its  instruments - because  hedge accounting  is  completely  dependent  on  the  nature  of  instruments  associated  with  it. Also  the  nature of  FASB  standards  tend  to  go  in  detail  rather  than  concept - ergo  it  may  not  be  possible to  really  revamp  the standard.

Practical help for homeowners

June 2, 2008

Analysis by: GLG Expert Contributor

Analysis of:The Role of Fair Value in the Subprime Mortgage Metltdown | www.aicpa.org

The article goes into sub-prime mortgage valuations. i wanted to add a couple of comments about the negaitive effects of homes/properties being repossessed. This causes losses for the lender as they do not recover the principal and interest outstanding. It causes devastation and financial and social/psychological loss for the families evicted. I feel governements could assist i delaying repossessions by offering grant/ cheap loan funding to home owners who cannot keep up payments, especially to homeowners who are borderline welfare homeowners. By offering grant/ cheap loan bridging funding the lenders and home-owners and the government (if they need to provide welfare/housing after repossessions) would all benefit.

Nitish GroverPrincipal, OwnerNitish Grover and Associates

The Fair Value Contribution to Understanding the Subprime Imbroglio

May 28, 2008

Analysis of:The Role of Fair Value in the Subprime Mortgage Metltdown | www.aicpa.org

The referred  article  gives  three different expert perspectives on fair value. In this analysis I  look  at  what  drives  fair  value  and  why fair value accounting applied on a consistent basis can help avoid poor financial reporting.

Economic Toll Mounts From High Oil Prices - Time for the Betty Ford Clinic?

May 27, 2008

Analysis by: GLG Expert Contributor

Analysis of:Economic Toll Mounts From High Oil Prices | www.nytimes.com

The US wastes massive amounts of energy in inefficient production facilities, via an inappropriate transportation system and in poorly designed homes and office buildings. Compounding the problem are financial institutions, which create commodities products for speculative purposes. Is it not time for energy addiction treatment at the Betty Ford Clinic before the US real economy and the US standard of living decline further?

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