NEW YORK - MBIA stock has declined since they reported their quarterly results on May 11. The former AAA rated insurer has seen its ratings slashed as losses mount on its struggling insurance portfolio. The company liabilities also are interesting. The company discounts the risk of the company going bankrupt from their liabilities. Thus liabilities go down when the company looks closer to going bankrupt, they go up when the company looks further away from bankruptcy. Meaning shareholder value is higher in accounting terms measured by book value when bankruptcy is more likely and lower when bankruptcy is more remote.
Who manages these accounting standards?
To read the full MBIA report click here.
No comments:
Post a Comment