No.6 (Serial No.61) Journal of Modern Accounting and Auditing‚ ISSN 1548-6583‚ USA Fair value accounting under financial crisis HE Cai-xia1‚ ZHANG Chi2 (1. School of Accounting‚ Zhongnan University of Economics and Law‚ Wuhan 430073‚ China; 2. School of Management‚ Huazhong University of Science and Technology‚ Wuhan 430073‚ China) Abstract: The recent financial crisis has led to a vigorous debate about the pros and cons of fair-value accounting (FVA). This debate presents a major challenge
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In the years leading up to the crisis‚ high consumption and low savings rates in the U.S. contributed to significant amounts of foreign money flowing into the U.S. from fast-growing economies in Asia and oil-producing countries. This inflow of funds combined with low U.S. interest rates from 2002-2004 resulted in easy credit conditions‚ which fueled both housing and credit bubbles. Loans of various types (e.g.‚ mortgage‚ credit card‚ and auto) were easy to obtain and consumers assumed an unprecedented
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Introduction 2 Real-life examples 2 Empirical cycle 2 Other concepts of Babbie‚ Gravetter and Forzano applied 2 Conclusion 2 References 2 Introduction The burst of the United States housing market bubble initiated the worldwide financial crisis. Amongst all housing regulations‚ the community reinvestment act (CRA) may be the most significant. The act passed in 1977 to improve low-income households’ housing opportunities. As such‚ the act raised the incentives for banks to provide mortgages
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APRIL 2009 The financial crisis in the US: key events‚ causes and responses The current financial crisis started in the US housing market in 2007. The crisis spread across the world and severely damaged the economies of many countries‚ including the US‚ and reached a new level in September 2008 as a number of prominent US-based financial institutions‚ including AIG and Lehman Brothers‚ collapsed. This Research Paper first examines the underlying causes of the crisis in the US. In particular
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Just after ten years of Asian financial crisis‚ another major financial crisis now concern for all developed and some developing countries is “Global Financial Crisis 2008.” It is beginning with the bankruptcy of Lehman Brothers on Sunday‚ September 14‚ 2008 and spread like a flood. At first U.S banking sector fall in a great liquidity crisis and simultaneously around the world stock markets have fallen‚ large financial institutions have collapsed or been bought out‚ and governments in even the wealthiest
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discussing the importance financial intermediaries have in an economy. This report is a summary of my findings gathered from books‚ magazine articles‚ Monash online database‚ speeches‚ newspaper articles and websites. It will explain to both peers and younger generations how financial intermediaries aid the flow of money in the financial world. In this report I will be looking closely at the roles of banks and how they have been affected by and dealt with the Global Financial Crisis. I was able to complete
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Economic and Social Impact of the Financial and Economic Crisis on Egypt A Study Prepared for the ILO By Samir Radwan April 2009 Table of Contents Executive Summary......................................................................................................................................................................... 3 I. II. Introduction ......................................................................................................................................
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There is not one specific reason for the financial crisis‚ but rather a combination of many events that caused the unusual market collapse of 2008. One explanation can be traced back to 1995 when the Clinton administration attempted to improve the Community Reinvestment Act‚ which required banks to distribute more loans in lower income areas. If the banks failed to abide by this new law‚ they would face harsh penalties‚ such as receiving limits on approvals for mergers and could even be hit with
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INDIAN SCENARIO AFTER THE GLOBAL FINANCIAL CRISIS 1. What initiated from the sub-prime mortgage crisis in USA two years ago was lugged forward un-seemingly till it led to the bankruptcy of Lehman Brothers in September‚ 2008. Thus was the commencement of the Global Financial Meltdown which has spread to all the nations including India. 2. The meltdown has affected the Indian financial system and has already forced the following changes into the national financial scheme‚ in order to restore some
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Leverage is borrowing money to amplify the outcome of a deal. The financial crisis includes sub-prime mortgages‚ collateralized debt obligations‚ frozen credit markets‚ and credit default swaps. The way that leverage works in a normal deal is that someone can buy merchandise for 20‚000 and sell it to someone else for 11‚000 and they gain 1‚000 in profit. However‚ using leverage if the same person with 10‚000 goes to borrow 990‚000 it will give him 1‚000‚000. He will then go buy 100 boxes with his
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