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Email Confirmation
Aug 23 2007
9:09AM
EDT
Mark to Make Believe Accounting
Thanks to the Financial Standards Accounting Board, public companies have several ways they can value their own assets when reporting earnings. "Level 1" is your basic mark-to-market value based on price quotes in public markets. "Level 2" lets companies use "observable inputs" to value assets when market prices aren't available.
And "Level 3"? Use your own judgment!
Wells Fargo used Level 3, and it turns out that using your own subjective asset valuation methods can be quite lucrative.
Read Yves Smith's full Market Movers blog post on this subject here.
See more in
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