SEC Agrees to Accounting Shift Sought by U.S. Banks Which Will Allow Them to Keep Pretending that They Haven’t Been Wiped Out
October 16th, 2008Via: Bloomberg:
The U.S. Securities and Exchange Commission agreed to back an effort by banks that may let them delay writedowns on a type of security that has declined in value during the collapse of the credit markets.
Banks in limited cases may account for so-called perpetual preferred securities as debt, letting them wait to write down their value, SEC Chief Accountant Conrad Hewitt wrote yesterday to Financial Accounting Standards Board Chairman Robert Herz. Hewitt’s interpretation can be used immediately in valuing the securities, which are issued without maturity dates.
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Sheez if I were a bank I wouldn’t want to have to valuate my “assets” either.
We have to sit through these gawd awful classes each month for training requirements and listen to the accountants and PHDs in accounting discuss the merits of SEC, and Accounting Board rulings. Yessir ye. Life is what it is.
But I was thinking while reading this article that there is some utility to the Accounting Standards Board. They have been working for years to make transparent standards for the international community re “fair market value.”
I think what they have been saying pretty much all along is a TURD is a TURD and you, the banks, can’t decide its not a TURD just because you have some object on your general ledger that is a TURD and you want to call it something like Chocolate Cake.
In laymen’s terms, when you donate to charity and they ask you while you do your taxes what you think the item would fetch at a used goods store, well, that’s what the ASB wants banks to do with these gosh darn stupid “whatever-the-shit-it-is-on the books.”
Believe me I am not a geek of accountancy. But oh-my-gawd. If these numb nuts are fighting over whether a debit is a credit…well, maybe it’ll by some time for the banks. But just time.