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Did You Know?“Did you know that the Level Three    Assets totaled an incredible    $540 billion just for Morgan  Stanley, ...
Did You Know?But what really is  $540 billion?              This image is of just               one million dollars.      ...
Fair Market       AccountingAdvanced Analysis and Application of         Accounting Data             ACG 6315            D...
Overview• Recent Market Conditions• Fair Value Accounting• Implications for Managers  and Investors• Important Points of I...
Recent Market Events  Significant events have greatly       impacted the market.   The stock market reached over 14,000 po...
Recent Market EventsDow Jones Industrial Average      2006 to Present                 Source: Yahoo! Finance
Recent Market Events  Consumer Confidence hasalso seen a significant decline.             Source: National Association    ...
Recent Market EventsNew Home Sales in the last 16        months:            Source: National Association          of Realt...
Recent Market EventsUnemployment has risen to a 14-year             high:             Source: Bureau of Labor Statistics
Banking & Finance Industry
Fair Value Accounting• Accounting Term• Market Value• If Asset• If Liability
Fair Value Accounting             Three             Levels:             Source: Federal             Reserve Bank of       ...
Implications : Managers & Investors  • One Uniform Model  Managers:  • Reduce Costs  • Reduce Potential Risk Exposure  Inv...
Important Points of Interest• Consistent Reporting Model• Valuation Guides and Instructions• Historical Reporting, Not His...
Recap• Recent Market Conditions   • Stock Market   • Consumer Confidence   • New Home Sales   • Unemployment Rate• Banking...
Recap• Fair Value Accounting• Implications for Both Managers and  Investors• Points of Interest    • Consistent Reporting ...
Thank you for your time.       Suggested Web sites      for further information:         SEC – Spotlight on       Fair Val...
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Presentation - Maria Gebhardt - Advanced Analysis of Accounting Data

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Presentation - Maria Gebhardt - Advanced Analysis of Accounting Data

  1. 1. Did You Know?“Did you know that the Level Three Assets totaled an incredible $540 billion just for Morgan Stanley, Goldman Sachs, MerrillLynch, Lehman Brothers, JPMorgan Chase, and Citigroup.” Source: (Moyer, 2008)
  2. 2. Did You Know?But what really is $540 billion? This image is of just one million dollars. For $540 billion, you would need 540,000,000 hundred dollar bills, or 54,000 piles of one million dollars.
  3. 3. Fair Market AccountingAdvanced Analysis and Application of Accounting Data ACG 6315 Dr. Jian Cao Maria Gebhardt December 1, 2008
  4. 4. Overview• Recent Market Conditions• Fair Value Accounting• Implications for Managers and Investors• Important Points of Interest• Recap of Presentation• Suggested Web Sites
  5. 5. Recent Market Events Significant events have greatly impacted the market. The stock market reached over 14,000 points in October 2007, yet plummeted to under 10,000 pointsduring October and November 2008.
  6. 6. Recent Market EventsDow Jones Industrial Average 2006 to Present Source: Yahoo! Finance
  7. 7. Recent Market Events Consumer Confidence hasalso seen a significant decline. Source: National Association of Realtors Economic Information
  8. 8. Recent Market EventsNew Home Sales in the last 16 months: Source: National Association of Realtors Economic Information
  9. 9. Recent Market EventsUnemployment has risen to a 14-year high: Source: Bureau of Labor Statistics
  10. 10. Banking & Finance Industry
  11. 11. Fair Value Accounting• Accounting Term• Market Value• If Asset• If Liability
  12. 12. Fair Value Accounting Three Levels: Source: Federal Reserve Bank of San Francisco
  13. 13. Implications : Managers & Investors • One Uniform Model Managers: • Reduce Costs • Reduce Potential Risk Exposure Investors: • Historical Reporting Still Has Value
  14. 14. Important Points of Interest• Consistent Reporting Model• Valuation Guides and Instructions• Historical Reporting, Not History• Gain Support, More Information
  15. 15. Recap• Recent Market Conditions • Stock Market • Consumer Confidence • New Home Sales • Unemployment Rate• Banking & Finance Industry Collapse
  16. 16. Recap• Fair Value Accounting• Implications for Both Managers and Investors• Points of Interest • Consistent Reporting • Valuation Guides • Historical Reporting • Gain Support
  17. 17. Thank you for your time. Suggested Web sites for further information: SEC – Spotlight on Fair Value Accounting: http://www.sec.gov/spotlight/fairvalue.htm FASB – Summary of Statement No. 157:http://www.fasb.org/st/summary/stsum157.shtml AICPA – FAQs About Fair Value Accounting:http://www.aicpa.org/MediaCenter/fva_faq.htm

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