GLG News by Mr. Nitish Grover FCA, AICPA Intl Associate, Principal, Owner
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Carbon Emissions and Control - Recent Developments - Accounting Implications
October 4, 2007
Europe's Carbon Market Needs a Policeman | www.ft.com
A recent conference at the UN in September did not achieve much in technical terms on how to combat climate change. Yet the fact that the conference took place and discussed the carbon credit mechanism and ways to oversee the same is indication enough of the growing importance of this instrument. Whether one agrees with the need to cap greenhouse gas emissions or not yet the emergence of carbon credits is an established fact. In this analysis I look at the importance of carbon credits from an accounting and finance viewpoint.
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Revised IAS 1 - Where are Accounting Standards Heading - Is there a confusion?
September 24, 2007
IASB issues revised standard on the presentation of financial statements | www.iasplus.com
The FASB-IASB convergence project appears to be in confusion. The revised IAS 1 effects 28 international accounting standards (IAS and IFRS) and by simply changing the nomenclature of a few standards. While the requirement to present owner changes in equity and other non-equity owner changes separately is beneficial yet the overall impact of the new standard appears to be much below expectations.
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The Subprime Crisis - The Long Term Effects
September 20, 2007
In Crisis, 2 Fed Chiefs Look Alike | www.nytimes.com
The latest efforts of the Fed will probably be successful.The subprime crisis will probably be capped. The long term effects will remain. The global economic system has gone through several gyrations over the last 10-15 years - the S&L crisis, the collapse of the ASEAN currencies, new emerging markets, the changing redistribution of economic resources. All this takes my mind goes back to the changing times between the first and second world wars. In this analysis I look at possible long term effects of the subprime crisis in a historical perspective.
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Accounting Development and the Effect of Ayn Rand
September 17, 2007
Ayn Rand's Literature of Capitalism | www.nytimes.com
As i read the analysis by Dr Mangiero and her views of whether we in the world of finance can learn anything from the writings of Ayn Rand the thought that came to my mind was 'Ayn Rand has actually contributed immensely to the world of finance'. In this analysis I look at how in my perspective she has guided the development of the world of accounting and finance without of course going into concepts like IRR, DCF etc.
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The subprime crisis - The Confusion goes further - Is there light at the end of the tunnel?
September 13, 2007
Central banks split over credit squeeze action | www.ft.com
The subprime crisis refuses to die down. The continued infusion of liquidity by the ECB, Fed and other central banks has only further compounded the crisis. The Bank of England is now questioning the approach. In this questioning I see some light. In this analysis I look at where this entire saga is heading and whether we will see some light at the end.
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The Balance Sheet - The Age Old Conundrum
September 11, 2007
When Balance Sheets Collide with the new economy | www.nytimes.com
The referred article refers to the age old conundrums of accounting - replacement cost vs. historical cost. Also the valuation of intangibles. It was only a few years back that software companies said that they needed higher valuations and accounting rules were outdated. Now we have the subprime crises and the CDO valuation conundrum. This analysis argues that current accounting rules are sufficient for all such problems and it is a fallacy to suggest that accounting rules need to be amended. What is probably needed is proper education for the accountants and auditors.
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September 4, 2007
Credit turmoil has hallmarks of bank run | www.ft.com
The actions of the Central Bankers are backfiring. The world capital markets continue to go from crises to crises week after week. The Bankers refer to the present crises as one effecting the shadow banking system over which they have no control. The situation however was not unexpected (especially if one considers that several observers including me) started writing about it a full one year back. In this analysis I look at what would happen to the shadow banking system in the coming days and what corrective steps can be expected.
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Fed Policy - Subprime Crises - Confusion further compounded - The jigsaw gets convoluted
September 4, 2007
Bernanke offers no signal on rate cut | www.ft.com
The latest announcements by the Fed and President Bush coming on the same day are no coincidence. They point to a deep rooted concern about the effects of the subprime situation and its effect on financial markets and economic growth. In this analysis I look at the possible effects of the announcements and why in my opinion Fed appears to remain as confused as ever about what actions it should take.
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Smooth Pensions - Accounting Valuation and Issues - Subprime Crisis - An overview
September 4, 2007
Subprime Crises Casts Shadow on Pensions | www.cfo.com
The current subprime crisis coming soon after the pension crisis last year when a number of pension funds found that they were underfunded has created a piquant situation. Funds which in any case were under pressure are now finding their substratum disappearing. Risk management which was anyway given the go by is now returning to haunt. In this background the FASB is in the process of issuing a discussion document on how pension funds should account for the subprime effected securities. In this analysis I examine what would be the effects of the subprime imbroglio for the pension fund sector.
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Fed Policy - Mortgage Lending - Effect on Accounting Valuation of CDO Instruments
August 27, 2007
Inside the Countrywide Lending Spree | www.nytimes.com
The referred article raises several interesting questions - the conduct of Fed policy, ethical lending and mortgage practices and the effect of all the above on the valuation of CDO and derivative instruments. In this analysis I attempt to look at all these factors and the possible directions that the entire CDO valuation imbroglio is going to take.
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August 20, 2007
What if IFRS replaced GAAP | www.cfo.com
Convergence of accounting standards is entering a new phase with the SEC having issued a paper with 72 questions asking for responses on the effects of the convergence process. The convergence questionnaire raises interesting questions like what would be the effect if standard setters could stuck at a crossroads and what would be the effect on development of quality standards. In this analysis I take a look at this debate from the perspective of whether it would be good for the accounting profession.
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Fed Cuts Key Rate - Too Little But Maybe Not Too Late
August 17, 2007
In Surprise Move, Fed Cuts Key Rate | www.nytimes.com
The Fed has finally started acting. One key rate has been cut. This would hopefully help revive the American mortgage market - but more important - help revive that brittle commodity called market confidence. In this analysis I look at the possible effects of the latest action of the Fed. As I was writing this analysis I also referred to AJP Taylor's "The Origins of The Second World War" and noted a number of similarities to how the Fed has gone wrong in the war on the subprime mortgage CDO vehicle.
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Support for Fed Policy - Why I Disagree - How overall economic costs will increase
August 14, 2007
USA Economy - Holding the Line | www.viewswire.com
The referred article appears to be a summary of Federal Reserve policy and briefings and virtually agrees ipso-facto with everything that the Fed says including rates of growth and sectoral balances in the American and global economy. My take on the same is however different and in this analysis I give my views on why the Fed should have been more proactive in tackling the subprime crises and the injection of liquidity in collaboration with the ECB is just not sufficient.
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Outsourcing - The Down Side - The Failures - Will they not stop the growing phenomenon?
August 13, 2007
Will Outsourcing Fly? | www.cfoasia.com
The referred article speaks of the failures of outsourcing, how companies have had to pay penalties for non-compliance with statutory requirements and why they still want to continue outsourcing. In this analysis I look at what keeps outsourcing going and whether we can expect a brake to be applied anytime soon.
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August 10, 2007
Fed Intervention Calms Markets | www.ft.com
Global markets and financial institutions have been hit by a hurricane. The Fed in its statements this year has taken the stand that there is no major crises. The events of the last few days in particular and since April this year point towards a crises situation. In this analysis I look at how the Fed is going wrong in not attacking the root cause of the problem. Also I argue why simply injecting extra liquidity into the system is no cure for the malaise that is presently striking the financial system.
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The CDO and Mortgage Crises - Bernanke and The Fed - Confusion Compounded !
August 8, 2007
Fed Leaves Rate Steady: No Sign of Future Cut | www.nytimes.com
The CDO and subprime mortgage crises is only just starting and needs to be controlled. The Fed and its Chairman are however of the opinion that it is not a major cause for worry and inflation is more important. In this analysis I argue how the priorities of the Central Bank are misplaced and the possible damaging effect that they will have on CDO's, mortgages and economic development both in America and across the world.
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Why Open Office Will Not be able to Replace Microsoft Excel
August 6, 2007
Spreadsheets are Free | www.cfo.com
Microsoft has a virtual stranglehold on the Small Office and Home Office segment. Open Source software like Open Office and Firefox have for long tried to break this virtual unbreakable clasp. In this analysis I look at why atleast in markets like India open office and the likes will not be able to break the Microsoft monopoly.
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August 3, 2007
Mortgage Lender Says it will close | www.nytimes.com
American Home Mortgage Investment is the latest to announce financing problems. The spread of the mortgage crises has expanded from New York to Australia, Europe, Japan and security markets all across the globe. In this analysis I look at the expanding crises and unlike Humpty Dumpty what are the chances of this all important industry being resurrected in a stronger and resurgent form.
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Auditors on the defensive worldwide - V (The Godfather Effect)
August 1, 2007
PCAOB Audit of Deloitte Causes Restatement, Again | www.cfo.com
Auditors are having a tough time. The PCAOB is behind their backs and auditors who normally report on the faults of clients now have to contend with having their own given back to them. In this analysis I look at the increasing problems of audit quality and the effect that these will have on auditors, clients and the users of financial statements.
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WSJ - The battle for control - News Corp. - Rhodes - Beyond the Core
July 30, 2007
Uncertainty hits Dow Jones Stock | www.ft.com
The referred news article reminded me of Cecil Rhodes and the concept of core competence. The Rhodes legacy has greatly influenced my thinking over the years and so has the concept of core competence. As I was writing these few words I referred to two books which have long been on my bookshelf The Founder- Cecil Rhodes and the Pursuit of Power by Rotberg and Beyond the Core by Chris Zook. In this analysis I look at the quest of News Corp to control Dow Jones and some reflections from Rhodes.
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