Earlier this month, FASB Staff Position FAS 115-2, Recognition and Presentation of Other-Than-Temporary Impairments, went into effect. FAS 115-2 changes the way in which other-than-temporary impairments, or OTTI, are evaluated and accounted for. “Under FSP FAS 115-2, an impairment for debt securities, in certain circumstances, is separated into the credit loss amount recognized in earnings and the amount related to all other factors (noncredit loss) recognized in other comprehensive income,” said the Office of Thrift Supervision in a May 14, 2009, memorandum. more

As Yogi Berra said, “The future ain’t what it used to be.” That’s particularly true in the treasury and finance function. To survive today’s economy and thrive into the future, finance execs will need to “future-proof” their finance function, says Margaret Yao, managing director with JPMorgan’s liquidity solutions area. One key to this goal is a robust cash and liquidity management structure that enhances your firm’s working capital position.

Four principles should guide finance execs as they try to improve their liquidity management structure, Yao notes. more

Even in downturns, some sectors do well. Not surprisingly, the asset-based lending world often is among them, as companies look for alternatives to scarce bank debt. Asset-based lending – that is, any loan that’s secured by an asset, such as inventory or accounts receivable – grew 8 percent in 2008 to nearly $600 billion in loans outstanding, reports the Commercial Finance Association (CFA), a trade group.

Industries in which asset-based lending has been most prevalent include retail, steel, and food. However, these industries account for less than one-third of total outstanding loans, as asset-based loans become more common across the economy, the CFA noted. more

If you’ve been focusing more on your firm’s investment policies, you’re not alone. The battering investors have taken in the stock market – the S&P 500 is finally inching back to levels last seen in 2002 – has prompted many institutional investors to examine just where they’re placing their money. According to the annual review by Pensions & Investments, the funded status of the 100 largest pension plans slid 30 percent in 2008, eliminating the past 5 years’ gains. more

In a March speech, Zhou Ziaochuan, governor of the People’s Bank of China, floated the notion of a single international reserve currency, “that is disconnected from individual nations and is able to remain stable in the long run.” (A reserve currency is maintained by central banks so that they can invest in and trade with other countries and manage the value of their own currency.)

Some analysts viewed the comments as little more than China stirring up trouble and flexing their growing economic clout. And, self-interest probably was one factor behind the idea, as this article from the Canadian Broadcasting Corporation points out. The Chinese, along with others around the globe, worry whether President Obama’s stimulus plan will prompt inflation, devaluing the greenbacks China holds. That would also increase the value of the yuan, cutting into China’s exports. more