Thursday, March 18, 2010

More about “Repo 105,” a name for a set of accounting tactics originated by Lehman.

We learn through a 2,200-page report from Lehman’s bankruptcy examiner, Anton R. Valukas, that the firm was taking a creative approach with its valuations and accounting. One crucial move was to shift assets off its books at the end of each quarter in exchange for cash through a clever accounting maneuver, called Repo 105, to make its leverage levels look lower than they were. Then they would bring the assets back onto its balance sheet days after issuing its earnings report. (via).

I prefer the recent North Korean punishment for some of our Wall Street stalwarts who came up with ideas like these...

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