tag:blogger.com,1999:blog-726517614184169426.post7032565268859051115..comments2023-08-23T04:15:41.751-05:00Comments on The Jaded Consumer: Earnings Obfuscation Under FAS 157Jaded Consumerhttp://www.blogger.com/profile/04631410690179296528noreply@blogger.comBlogger3125tag:blogger.com,1999:blog-726517614184169426.post-45470935278119084262011-11-09T20:47:31.523-06:002011-11-09T20:47:31.523-06:00you rock thank you for the commentsyou rock thank you for the commentsAnonymousnoreply@blogger.comtag:blogger.com,1999:blog-726517614184169426.post-16674471700620777912011-11-09T15:05:19.883-06:002011-11-09T15:05:19.883-06:00If ACAS were allowed to consolidate ECAS assets an...If ACAS were allowed to consolidate ECAS assets and results with broader ACAS assets and results, ACAS would eliminate the double-discount issue affecting the NAV impact of holding investments in ECAS. On the other hand, this will prevent ACAS from applying a NAV premium to ECAS once performance begins justifying a NAV premium.<br /><br />With FAS 157 causing earnings to include unrealized gains, ACAS' post-consolidation earnings would look very nice when the portfolio companies are heading up. This may help share prices during rising markets.<br /><br />Then, of course, people will be comparing ACAS' dividend (driven by taxable income) to its SEC-reported FAS-157-compliant "income" and either asking why ACAS doesn't pay more, or how ACAS can "sustain" a dividend that doesn't match "earnings". Under FAS 157, there will never be peace because SEC "earnings" won't be the same as IRS "income" unless assets are static. And what's that likelihood?<br /><br />Thanks for stopping by!Jaded Consumerhttps://www.blogger.com/profile/04631410690179296528noreply@blogger.comtag:blogger.com,1999:blog-726517614184169426.post-5367973045836453112011-11-09T10:46:41.688-06:002011-11-09T10:46:41.688-06:00Asset marks. SEC. Regulations.
With specific rega...Asset marks. SEC. Regulations.<br /><br />With specific regards to ACAS I offer the following snippet of the most recent conference call. As always your comments are appreciated and respected.<br /><br /><br /><br />Our next question comes from Andrew Shanahan from Knighthead Capital.<br /><br />Andrew Shanahan - Knighthead Capital:<br /><br />I just had a quick question. If our portfolio companies in Europe are performing so well, why not fully consolidate ECAS to eliminate the volatility we get from using the comparable BDC multiples to value it?<br /><br />John Erickson:<br /><br />That's a great question, we would love to do that. Unfortunately at time we do the accounting for it, the FASB and SEC guidance said we could not consolidate it. We thought that we'd have a direct dialogue with the SEC on. Just recently the FASB actually put out a draft release that actually is trying to converge U.S. GAAP with IFRS. And as a part of that process they would actually go back to saying that we have to consolidate ECAS.<br /><br />So that's actually potentially in the work. It's something that we'll be monitoring and obviously at appropriate time we would be providing more disclosure around. But we've declined consolidating at this point and it's something that is really just driven by GAAP.<br /><br />Andrew Shanahan - Knighthead Capital<br /><br />Is that something that the SEC has put up for a comment yet or is it kind of in the pre-comment discussion period?<br /><br />Pete Deoudes:<br /><br />Currently the FASB had issued exposure draft on accounting by investment companies. This was about a week ago and it's up for comment period right now. And that comment period ends in the beginning of January. And the expectation would be shortly thereafter they would issue a final accounting guidance on that.<br /><br />John Erickson:<br /><br />Which the best guess would be applicable for 2013.<br />Pete Deoudes<br /><br />They haven't provided any kind of guidance in terms of any types of implementation day or an adoption day.<br /><br />John Erickson:<br /><br />Or voluntary adoption those type of things.<br /><br />Pete Deoudes:<br /><br />They won't provide that until. They actually issue the final guidance.Anonymousnoreply@blogger.com