GAAP is moot in bankruptcy court, as fair-value estimates will help determine whether claims of insolvency are valid in a hotly contested case.
Marie Leone, CFO.com | US
September 2, 2009
Dear Cohorts! GollyGee...This is proof that the Gods love old GAAP groupies, and want data to make us happy! At the birth of *fair-value*, we began hoping that IT was an Ideal! Now, on Judiciary's arm---Evidence*! At last, a full day of Sun on data!
Posted by mm Price | September 12, 2009 10:40 pm
If liabilities were understated, then the investors in the IPO were mislead! Do investors have a lawsuit against the underwriter of the IPO? Of course, being shareholders they are on the bottom of the bankruptcy list. Now we have a larger question of "fair valuation" for potential shareholders and the underwriters. Years ago I was doing due diligence work on a large retailer, part of a conglomerate in the process of going public. The book value of their inventory was stated in original cost but market value was a fraction as admitted by the manager because the goods were out of date fashion wise. Leon Haller, author of Making Sense of Accounting Information
Posted by Leon Haller | September 07, 2009 09:45 am© CFO Publishing Corporation 2009. All rights reserved.