The more Citigroup Inc. says about its structured investment vehicles, or SIVs, the more questionable the bank's accounting for them is beginning to look.
On Oct. 19, Citigroup issued a one-page fact sheet about the seven SIVs it sponsors, all of which it keeps off the balance sheet. Among other things, the largest U.S. bank said it ``has no contractual obligation to provide liquidity facilities or guarantees to any of the Citi-advised SIVs.''
Okay, so it has no explicit obligation. That begs the question: Does Citigroup have any implicit obligation to protect SIV investors from losses? Citigroup isn't saying. It's a crucial question. If Citigroup is implicitly obligated to absorb most of the SIVs' losses, then the SIVs already should be on Citigroup's balance sheet, under the accounting rules....MORE
The Financial Accounting Standards Board replaced statement 125 with FASB 140 and after the shenanigans at Enron came to light kept tweaking, with another revision due next year.Here's The WSJ's MarketBeat blog:
Reading: Remember Enron
Here's the NYSSCPA's CPA Journal:
Enron and the Raptors
QSPEs, Derivatives, and FAS 140
The whole enchilada, 142 page PDF.