Financial Instruments and Institutions: Accounting and Disclosure Rules
Financial Instruments & InstitutionsAccounting and Disclosure RulesSecond EditionFinancial reporting for financial instruments and institutions is undergoing a period of unprecedented change and relevance for financial analysis. In the past decade, the Financial Accounting Standards Board (FASB) has issued major standards on derivatives and hedging, transfers of financial instruments including securitizations, servicing of financial assets, consolidation of special purpose/variable interest entities, hybrid financial instruments, financial guarantees, and fair value measurements.Now in a Second Edition updated to reflect the many significant changes in financial reporting rules, regulations, and economic conditions that have occurred since the publication of the first edition, Stephen Ryan's Financial Instruments and Institutions: Accounting and Disclosure Rules provides users and preparers of financial reports with the tools necessary to construct as coherent a story as possible about how firms generate or destroy value using financial instruments.This book equips professionals to fully exploit the various sources of information about the fair value and risks of financial instruments and explains how "fair value" provides the most natural measurement basis for reporting financial instruments. It contends that users of financial reports do not need to know all of the myriad details involved in each financial reporting rule, but rather only the critical features that make or break the representational faithfulness of the reports.Precise, clear, and helpful, Financial Instruments and Institutions, Second Edition examines six types of financial institutions in detail:ThriftsMortgage banksCommercial banksLessorsProperty-casualty insurersLife insurersThese institutions were chosen because each reflects specific financial transactions in a clear fashion and/or because each has distinctive accounting or disclosure requirements. Financial Instruments and Institutions describes the activities and risks of each in an economically grounded yet intuitive fashion, using numerous cases from actual financial institutions' financial reports to illustrate when fair value accounting for financial instruments works well and when it is fragile.