Navistar says SEC probes accounting practices [Reuters]
Truck and engine maker Navistar International Corp. said Thursday that it is the target of a formal U.S. Securities and Exchange Commission inquiry into accounting and disclosure matters and withdrew its full-year earnings forecast until it releases third-quarter results. The company said it expects to post an adjusted third-quarter pre-tax loss of $80 million to $115 million but expects to return to profitability in the fourth quarter.
American International Group Inc. is looking to buy back a large amount of its shares from the government, according to people familiar with the company's thinking, in a push that could make the U.S. a minority shareholder by the fall and enable the insurer to fully repay its bailout sooner than expected. Bringing the government's current 61% stake to below 50% would be a victory for AIG and its management team. But it could bring the additional headache of tough oversight from the Federal Reserve, which is expected to regulate the company when the U.S. is no longer a majority owner.
It's Crunch Time for Loan Accounting – and Convergence [Accounting Onion]
Once one chooses to ignore market values and to account for loans on the basis of "amortized cost" – as the IASB has "tentatively" concluded and the FASB may now be starting to question once again – the inevitable and ineffable question then becomes how and when to recognize losses on bad loans. Let's examine the alternatives. The current rules constitute what is known as the 'incurred loss model.' Its only defender in the U.S. is the American Bankers Association, and that should be sufficient to put it to bed.
CB: "So, what's my problem with using horses in the Olympics and using horses as tax deductions? Well, I don't like horses."