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November 28, 2022

ANR: Hocus Bogus Accounting; The Latest ‘Meh’ for the Mortgage Tax Break; Olympus Okays Directors | 04.20.12

The Fog of Bank Accounting Adjustments [DealBook/NYT]
[D]ebt accounting adjustments may not reflect what is going on in the real world – and may divert investors from more meaningful measures of creditworthiness. The accounting adjustments are partly based on the prices of credit default swaps, derivatives contracts investors can buy to protect themselves against the default of a company.

AIG revises earnings up after accounting change [BBW]
American International Group Inc. has revised its earnings for the last two years to reflect an accounting change. In a regulatory filing Thursday, the New York insurance company said it amended its financial information for 2011 and 2010 after adopting a different accounting standard for deferred acquisition costs. The change raised AIG's profit last year to $20 billion from $17 billion. For 2010, revised net income was $10 billion instead of the previously reported $7.79 billion

Mortgage-Tax Break Curbed by Housing Slump [Bloomberg]
The cost of one of the country’s most expensive individual tax breaks is shrinking as the number of Americans who own homes declines and mortgage rates hover near historic lows. Federal tax filers claimed almost $71 billion less in mortgage interest deductions for 2009 than for 2007, a 14 percent drop, according to the Internal Revenue Service. That trend continued in 2010, the IRS said in a report last month, as preliminary data showed that lower interest rates, home ownership and home prices curbed use of the tax deduction by 7.2 percent. “People are walking away and losing their homes and they no longer have the mortgage interest deductions,” said Andrew Hanson, an assistant professor of economics at Georgia State University who has researched the tax break. “That’s got to be a big part of it.”

Olympus Shareholders Approve New Directors [WSJ]

Olympus Corp. […] managed to clinch approval for new management at its first face-off with shareholders since its $1.5 billion accounting scandal broke six months ago, despite an unusually large proportion of investors opposing the nominees for president, chairman and one other director. Even though it was widely expected, the outcome of the company's extraordinary general meeting Friday may disillusion some foreign investors, who openly expressed concerns about the close ties between some new board members and the company's lenders.
 
Scottsdale accountant indicted in $66 million ponzi scheme [AZC]

A federal grand jury in Phoenix has returned a 102-count indictment against a former Scottsdale certified public accountant on charges he operated a $66 million ponzi scheme. The indictment of Daniel Wise, 55, was announced Thursday by the U.S. Attorney's Office for Arizona. He is accused of mail and wire fraud, and money laundering.
 
Former accountant chases NFL dreams with Dolphins [NFLN]
See? Unrealistic dreams of playing professional sports can come true! Just not yours.
 
Tacoma woman charged with $540K embezzlement [ST]
A Tacoma woman has been indicted on charges she stole more than $540,000 from the company she worked for, Food Services of America. Julie Anne White worked as an accountant at FSA's center in Kent. Federal prosecutors say that from 2007 until last year, she used the company's electronic payment system to pay the mortgage on her home, to transfer money to her own account and to buy a $39,000 boat.

 

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