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If this holder employed bad accounting (by counting promised dollars as dollars-in-hand), then they may fail as well (and so on). That's called accrual account
by 0x44 18y ago
If this holder employed bad accounting (by counting promised dollars as dollars-in-hand), then they may fail as well (and so on).
That's called accrual accounting, and is required by United States Generally Accepted Accounting Principles, International Financial Reporting Standards, and the UK's Companies Act.
- mindslight 18y agoWhat I mean is if the holder only employed such accounting. I can see how such figures are normally useful, but the abstraction can break down when you aren't paid (and in this case, did so catastrophically). If your investment bank wants to survive downturns, it should be factoring this possibility into its decisions.