Q1. âFair value accounting is argued to be conceptually and practically preferable to amortized cost accounting for most financial instruments, especially for financial institutions holding matched positions in these instruments.â What are your views about this statement?
Q2. Mortgage Banksâ main revenues are usually fees for mortgage origination and servicing as well as gains on the sale of mortgages. Although amortization and impairment of Mortgage Service Rights are logically expenses and losses, respectively, mortgage banks often deduct these items directly from mortgage servicing fees as if they are contra-revenues. Prepare an Income Statement of a Mortgage Bank with at least five items of revenue and three items of expenses with imaginary figures.
Q3. Statement of Financial Accounting Standards (SFAS) NO. 140 defines transfers of financial assets as conveyances of noncash financial assets by and to someone other than the issuer of the assets. These transfers include securitizations. What motivates issuers to securitize? Give some reasons.
Q1. âFair value accounting is argued to be conceptually and practically preferable to amortized cost accounting for most financial instruments, especially for financial institutions holding matched positions in these instruments.â What are your views about this statement?
Q2. Mortgage Banksâ main revenues are usually fees for mortgage origination and servicing as well as gains on the sale of mortgages. Although amortization and impairment of Mortgage Service Rights are logically expenses and losses, respectively, mortgage banks often deduct these items directly from mortgage servicing fees as if they are contra-revenues. Prepare an Income Statement of a Mortgage Bank with at least five items of revenue and three items of expenses with imaginary figures.
Q3. Statement of Financial Accounting Standards (SFAS) NO. 140 defines transfers of financial assets as conveyances of noncash financial assets by and to someone other than the issuer of the assets. These transfers include securitizations. What motivates issuers to securitize? Give some reasons.
