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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory
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To: redfrecknj who wrote (84527)8/4/2007 10:22:56 AM
From: stan_hughes  Read Replies (1) of 110194
 
Now that's rich -- somehow a Balance Sheet is still okay as long as you don't record those pesky decreases in value that you've experienced on the left side of the page?

Let me be the first to name this new accounting concept -- I dub thee, the recognition of "Contingent Assets"

Let me also be the one to draft the new FASB Statement on Contingent Assets: "Contingent Assets" are those assets which are impaired or even valueless that may still remain recorded at full value on the books of a corporation based upon management's sole assessment of the future probability of collection rather than market values. For example, suppose Mortgage Company ABC holds $500MM in California and Nevada mortgage debt where the underlying collateral no longer exists, and in some cases may even be negative. The mortgage portfolio may still be classified at full face value as a Contingent Asset on the books of ABC based upon a possibility that the current defaulters could each individually win the Powerball Lottery before the end of the term of their mortgages, enhancing ABC's prospects of collecting the debts. As such, no impairment need be recognized or recorded in any interim period until either the Powerball Lottery is discontinued or the last mortgagor is declared legally dead, whichever occurs first.

Note: All inquiries to be directed to Federal Reserve Bank Chairman Bernanke directly
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