GLG News by Stock Repurchase Accounting Academic Experts

Anthony CatanachDirectorDI2 Associates, LLC

More Under Armour Red Flags...

November 20, 2009

Analysis of:Stock Jocks Punish Under Armour's Mathletes | www.cnbc.com

Under Armour's most recent 10K contains a number of financial reporting "red flags" that reflect a cavalier attitude toward financial reporting transparency.

Anthony CatanachDirectorDI2 Associates, LLC

What the Former SEC Chairmen Missed...

November 19, 2009

Analysis of:Don't Let Banks Hide Bad Assets | online.wsj.com

Conceptually, the arguments favoring fair value accounting are sound and quite appealing. Unquestionably, financial statement users will benefit from data about how a company’s assets and liabilities change in value during a reporting period. However, there are two major issues associated with fair value reporting that accountants, investors, legislators, and regulators need to address in the wake of our most recent financial crisis.

Anthony CatanachDirectorDI2 Associates, LLC

What Have the Accountants Done For Us Lately?

November 19, 2009

Analysis of:Systemic risk legislation threatens FASB’s independence | www.accountingweb.com

Debates about the causes of the recent financial crisis have yet to focus on the inability of financial institution independent auditors to provide adequate oversight over management’s valuations of financial instruments.

Robert KempProfessorUniversity of Virginia - CC

Reality Impact - Grasping the Cost of Not Acting to Restore Trust in Capital Markets

September 19, 2008

Analysis of:Fed Tentatively Agrees to Provide $85bn to AIG | www.washingtonpost.com

There are significant arguments today on what should or should not be done to address the current capital market crisis.  In reality, market economies first and foremost rely on trust.  When trust is lacking, the ramifications are significant and far reaching.  The mistrust of one sector multiples into problems throughout other sectors.  A good example is the impact of capital markets on nonfinancial services businesses.  This point is easily seen in the cost of credit, or the lack of credit.  However the impact is much greater than mere credit.  An example is unfudned pension and other post retirement benefit plans (OPEB). The cost of not restoring trust in the capital markets needs to be understood, in all aspects.  The price is high (e.g., government spending and assuming risk) on both sides of the argument.  However all costs, on both sides, must be understood and measured before judgements are made.

Robert KempProfessorUniversity of Virginia - CC

Fair Value Accounting - The Good And Bad Of It In The Real World

September 15, 2008

Analysis of:Fair-Value Revolution: Historical cost accounting is fading as Corporate America marches into a new era. | www.cfo.com

Fair value accounting, or mark-to-market accounting, is not new.  The debate of how to account for value has been around for decades.  However the implications of fair value accounting, versus historical accounting, are far reaching and often not grasped.  A society needs to be careful in setting accounting standards that may or may not reflect its cultural values.

Robert KempProfessorUniversity of Virginia - CC

Valuation - The Trick Is In The Fundamentals

August 25, 2008

Analysis of:Kazakh rival lifts ENRC stake to block bid | www.ft.com

To accept or reject an offer to sell all or part of a company is a challenge.  There are two issues.  First is the maximization of shareholder value.  The second is understanding the basis of conflicting valuations. 

Gil ManzonAssociate ProfessorTRUSTEES OF BOSTON COLLEGE

Is Western Union Market Share Taking Market Share from Competitors?

April 24, 2008

Analysis of:Western Union 1Q profit rises 7 percent on international | biz.yahoo.com

I think the information presented in the article is consistent with Western Union picking up market share from competitors. Despite flat U.S. revenues over 05-07 period and likely near flat revenues from the U.S. in Q108 in part attributable to the Mexican results, Western Union has gained significant international market share over the 05-07 period and, with Q108 gains coming from China and India, this trend appears to be continuing (international revenues up 9% relative to total in 05-07 period and 43% in absolute terms). Absent a significant shift in the size of the market for money transfers, these gains would have come at the expense of competitors.

Robert KempProfessorUniversity of Virginia - CC

Value Creation in Banking: The Key Is Information

April 1, 2008

Analysis of:Top Tier Bonanza In Store For Core Banking Vendors | www.finextra.com

1.   Banks create value for shareholders by creating value for customers.  Much of that value to customers is embedded in information systems. 2.   The business of banking evolves quickly, forcing banks to evolve their competitive strategy and resulting advantage.  Information systems are at the heart of this evolution. 3.   The recent challenges of risk management will only accentuate the oversight of regulators, requiring banks to seek better information systems (e.g., more accurate, timely, and integrated information). 4.   As noted by the article, this will create a boom for consultants and providers of information systems.

Robert KempProfessorUniversity of Virginia - CC

Derivatives - More Disclosure Is Always Better for Financial Analysts

March 27, 2008

Analysis of:Statement of Financial Accounting Standards 161 | www.fasb.org

1.  Value is defined by risk.  Risk deals with uncertainty of the future.  How a firm manages risk is a major determinant of its value. 2.  Accounting standards are dedicated to reporting the past.  Given it is the past, there is little risk or uncertainty regarding such events.  Merely reporting the past does not give the financial analyst the insights needed. 3.  FASB 161 tries to bridge this gap between past/present and the future.  It attempts to make management disclose intent.  It attempts to answer the following question: "How will current actions and positions affect future performance?"      

Robert KempProfessorUniversity of Virginia - CC

Understanding the Pros and Cons of Pension Fund Investing - the Issue Applied to Asian Investments

February 26, 2008

Analysis of:Canada Pension Funds Turn to Asia | online.wsj.com

1.    Investing in Asia has three benefits.  First, there are the returns from investing in environments that show greater growth potential than in the West. Second, there are the returns from investing in opportunities denominated in currencies that are forecasted to appreciate. Three, there is the benefit of diversification. 2.     The costs, or risks, of investing in Asia are threefold: First, there is the risk that high growth opportunities present. Second, there is the risk of investing in a depreciating, not appreciating currency. Third, there is the asset-liability risk inherent in all financial intermediaries, particularly pension funds.

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