The Philosophers of Norwalk Ask: "What's an Asset?" (Financial Accounting Standards Board, Located in Norwalk, CT)(includes Information on History of the Generally Accepted Accounting Principles)

By Blount, Edmon W. | ABA Banking Journal, July 1995 | Go to article overview

The Philosophers of Norwalk Ask: "What's an Asset?" (Financial Accounting Standards Board, Located in Norwalk, CT)(includes Information on History of the Generally Accepted Accounting Principles)


Blount, Edmon W., ABA Banking Journal


During the next few months, the certified professional accountants' rule-making will be revising a half-dozen key rules that control how assets are recorded in the financial statements of bankers and their customers. Many of today's headline activities will be affected, such as asset securitization, portfolio hedging, and the use of stock-options for compensation. Changes will even be triggered in baseline corporate services, including factoring, securities lending and the sale of repurchase agreements, receivables, loan participations, mortgage servicing rights, and capital leases.

New rules are needed to manage the new products which have come along with the enormous growth in market-based banking. For instance, accountants have found that very complex tracking is needed for collateralized mortgage obligations, asset-based loans and, worst of all, mutual fund families. Accounting problems arise because many traditional rules assume quite naturally that an auditor has ready access to an investor's property--or at least to its title. However, when bankers sell their loans to an investor, rights to the collateral are vested in a specialpurpose trust. That can be tracked, more or less, but the securities' title itself may even be elusive if the certificates are stored in central depositories.

The resulting attenuation of control when bank assets are turned into securities creates a tracking challenge without precedent and even gives rise to the occasional bookkeeping paradox. For instance, when a selling banker agrees to buy back government securities on a specific future date, accountants record the "repurchase agreement" as a borrowing. Yet, if that same banker agrees to buy back or swap auto loans after a future default, then, despite the similarity, the bank's accountants record that transaction as a sale. …

The rest of this article is only available to active members of Questia

Sign up now for a free, 1-day trial and receive full access to:

  • Questia's entire collection
  • Automatic bibliography creation
  • More helpful research tools like notes, citations, and highlights
  • Ad-free environment

Already a member? Log in now.

Notes for this article

Add a new note
If you are trying to select text to create highlights or citations, remember that you must now click or tap on the first word, and then click or tap on the last word.
One moment ...
Default project is now your active project.
Project items

Items saved from this article

This article has been saved
Highlights (0)
Some of your highlights are legacy items.

Highlights saved before July 30, 2012 will not be displayed on their respective source pages.

You can easily re-create the highlights by opening the book page or article, selecting the text, and clicking “Highlight.”

Citations (0)
Some of your citations are legacy items.

Any citation created before July 30, 2012 will labeled as a “Cited page.” New citations will be saved as cited passages, pages or articles.

We also added the ability to view new citations from your projects or the book or article where you created them.

Notes (0)
Bookmarks (0)

You have no saved items from this article

Project items include:
  • Saved book/article
  • Highlights
  • Quotes/citations
  • Notes
  • Bookmarks
Notes
Cite this article

Cited article

Style
Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

(Einhorn, 1992, p. 25)

(Einhorn 25)

1

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Cited article

The Philosophers of Norwalk Ask: "What's an Asset?" (Financial Accounting Standards Board, Located in Norwalk, CT)(includes Information on History of the Generally Accepted Accounting Principles)
Settings

Settings

Typeface
Text size Smaller Larger Reset View mode
Search within

Search within this article

Look up

Look up a word

  • Dictionary
  • Thesaurus
Please submit a word or phrase above.
Print this page

Print this page

Why can't I print more than one page at a time?

Full screen

matching results for page

Cited passage

Style
Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn, 1992, p. 25).

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn 25)

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences."1

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Cited passage

Welcome to the new Questia Reader

The Questia Reader has been updated to provide you with an even better online reading experience.  It is now 100% Responsive, which means you can read our books and articles on any sized device you wish.  All of your favorite tools like notes, highlights, and citations are still here, but the way you select text has been updated to be easier to use, especially on touchscreen devices.  Here's how:

1. Click or tap the first word you want to select.
2. Click or tap the last word you want to select.

OK, got it!

Thanks for trying Questia!

Please continue trying out our research tools, but please note, full functionality is available only to our active members.

Your work will be lost once you leave this Web page.

For full access in an ad-free environment, sign up now for a FREE, 1-day trial.

Already a member? Log in now.