Many accounting and financial reporting executives still wonder how they should report the fair market value of assets that are trapped in frozen or otherwise illiquid markets. Now investment banking giant Goldman Sachs has given a glimpse into how it has approached the problem.
Goldman submitted a nine-page memo to the Financial Crisis Inquiry Commission last month outlining how it arrived at fair values for its most troubled securities in 2007 and 2008. Those securities, mostly backed by residential mortgages, were insured by American International Group. As the housing market tanked in 2008, Goldman used its values as the basis for ...