
Fannie Mae earnings filing delayed
According to the mortgage giant, completion of the review by KPMG is subject to resolution of its accounting issues and the independent auditor’s “completion of certain other procedures, including its evaluation of results that are not yet available of the investigation of certain matters in the Ofheo report”, dated September 20.
In addition, Fannie Mae may needs to restate its financial results for previous periods if the Ofheo examination reveals it did not qualify for hedge accounting. “The effect on current and past Generally Accepted Accounting Principles (GAAP) and core business earnings would be significant,” stated Fannie Mae. “If Fannie Mae does not qualify for hedge accounting for all periods since its January 1, 2001 adoption of FAS 133, the company estimates it would be required to record in earnings a net cumulative after-tax loss on its derivatives transactions of approximately $9.0 billion as of September 20, 2004,” the release stated.
Under hedge accounting, an organisation can defer gains and losses to the extent the “hedge” is effective. Under question is whether Fannie Mae wrongly assumed “perfect effectiveness” for many of its hedges.
In related news, Fannie Mae will release its October 2004 Monthly Financial Summary report - containing business volumes, delinquency rates and interest rate risk disclosures - on November 19.
Only users who have a paid subscription or are part of a corporate subscription are able to print or copy content.
To access these options, along with all other subscription benefits, please contact info@risk.net or view our subscription options here: http://subscriptions.risk.net/subscribe
You are currently unable to print this content. Please contact info@risk.net to find out more.
You are currently unable to copy this content. Please contact info@risk.net to find out more.
Copyright Infopro Digital Limited. All rights reserved.
You may share this content using our article tools. Printing this content is for the sole use of the Authorised User (named subscriber), as outlined in our terms and conditions - https://www.infopro-insight.com/terms-conditions/insight-subscriptions/
If you would like to purchase additional rights please email info@risk.net
Copyright Infopro Digital Limited. All rights reserved.
You may share this content using our article tools. Copying this content is for the sole use of the Authorised User (named subscriber), as outlined in our terms and conditions - https://www.infopro-insight.com/terms-conditions/insight-subscriptions/
If you would like to purchase additional rights please email info@risk.net
More on Regulation
SEC may lack legal clout to impose new dealer rule – Citadel
Adoption of quantitative dealer definition may require congressional changes to US Securities Exchange Act
US Basel endgame hits clearing with op risk capital charges
Dealers also fret about unlevel playing field compared with requirements in the EU
CFTC’s clearing house recovery rule splits industry
Some fear CCPs will fast-track recovery, others say any rule book will be ignored in emergency
EU banks ‘will play for time’ in stand-off over India’s CCPs
Lawyers say banks are unlikely to set up subsidiaries and will instead pin hopes on revised Emir fix
ECB mulls intervention on uneven banking book reporting
Inconsistency among EU banks on whether deposits and loans are in scope for credit spread risk
Iosco warns of leveraged loan ‘vulnerabilities’
As recovery rates plummet, report calls for clearer covenants and more transparency on addbacks
Narrow path to compromise on EU’s post-Brexit clearing rules
Lawmakers unlikely to support industry demand to delete Emir active accounts proposal altogether
The Fed’s stress test models are inaccurate. Something has to change
First step for US regulator to improve its bank loss forecasts would be to open up its models to public scrutiny, argue two banking industry advocates