The chairman of the accounting standards board notes that his staff sent up a warning flare about subprime mortgages in 2005.
If only the financial world had paid more attention to FSP SOP 94-6-1, there might not have been a subprime mortgage crisis.
It is safe to say that many preparers of financial statements, not to mention the large majority of investors, pay little attention to the deliberations of the Financial Accounting Standards Board — at least, that is, until they result in rules that directly affect financial results.
advertisement
Yet at a conference Thursday morning, FASB chairman Robert Herz reminded both investors and preparers that his staff issued an unusual six-page "reminder" back in December 2005 that warned that investments in subprime mortgages were risky.
Unfortunately, the title of the document was not "Investments in Subprime Mortgages are Risky."
See full Article.
Posts
