how'd you do?
This is from a pitchbook i did this summer (changed the name of the bank I worked for to "The Bank" and their ABCP conduit to "theconduit") so bear with me...
I agree. Im not sure why swizzc is telling you all this technical information. Unless that actually happened to you, you shouldnt get ppl nervousby saying they need to know technicalities.
I wasn't saying he had to know them. I interviewed at many of the top banks and interned at a top 5 bank this summer and they def would havebeen very impressed if I knew any of this knowledge in my interview. Was just trying to help OP out.. but no, I do not have any experience interviewing at atop 4 accounting firm. Apparently, you do not need to know anything about accounting so you should be in the clear.
im not sure if your trying to be sarcastic. but on the real. you need to have taken accounting courses and have gotten good grades. so its a givenyou have basic accounting down. but you COULD not know anything and actually get a job. i wasnt asked one accounting question in all parts of my interviews.weird
If it pertains to a bank, I think that's different...typically, Banks and Insurance companies have their own criteria whereas other companiesdon't. I had to do enough analysis for Partnerships and LLCs, so I don't think much has changed in that regard.Originally Posted by swizzc
This is from a pitchbook i did this summer (changed the name of the bank I worked for to "The Bank" and their ABCP conduit to "the conduit") so bear with me...
Old FIN46R
FIN 46R is a statement from the Financial Accounting Standards Board pertaining to the consolidation of VIEs
A VIE is a distinct type of SPE that does not qualify as a QSPE
Most banks conduits (what they sell the CP for these assets through) are owned by a independent 3rd party and are a VIE
FIN 46R defines a VIE as having one or more of the following characteristics
The Owner's equity investment is not sufficient to permit activities without additional subordinated financial support provided by other parties
Equity investment less than 10% of total assets qualifies
The Owner's equity investment lacks usual voting rights, the obligation to absorb losses or the right to receive residual returns
The Owner's voting rights are large compared to their small investment in the VIE and most activities are conducted on behalf of an investor with a much smaller voting interest (the Administrator)
FIN 46R currently requires consolidation by a party that holds a majority of the risks of the VIE
The consolidation decision is made based on a quantitative analysis of the expected losses of the VIE
The bank, by employing a 3rd party to bear the majority of risk in the conduit, currently does not have to consolidate the conduit on their balance sheet
Amended FIN46R
The current quantitative analysis of a VIE's (the conduit's) expected losses to determine whether or not it will be consolidated on the balance sheet under FIN 46R will be changed to a qualitative analysis to determine consolidation
Instead of identifying the party that bears the majority of the VIE's expected losses as the consolidating party, the analysis will now look at the primary beneficiary of the VIE (the bank) as well to determine consolidation
This qualitative analysis will say a company must consolidate a VIE if they have:
Under the proposed methodology, the conduit would qualify for consolidation on the bank's balance sheet because:
The Bank acts as the servicer/administrator for the conduit
The Bank has the power direct matters that significantly impact the success of the conduit
Liquidity facilities and owned interest in the conduit by The Bank will likely qualify for consolidation
The Bank would likely absorb significant gains or losses from the conduit
Hope that heps man.
ya, i only looked into it with regards to banks.. what line of work are you in?Originally Posted by LazyJ10
If it pertains to a bank, I think that's different...typically, Banks and Insurance companies have their own criteria whereas other companies don't. I had to do enough analysis for Partnerships and LLCs, so I don't think much has changed in that regard.Originally Posted by swizzc
This is from a pitchbook i did this summer (changed the name of the bank I worked for to "The Bank" and their ABCP conduit to "the conduit") so bear with me...
Old FIN46R
FIN 46R is a statement from the Financial Accounting Standards Board pertaining to the consolidation of VIEs
A VIE is a distinct type of SPE that does not qualify as a QSPE
Most banks conduits (what they sell the CP for these assets through) are owned by a independent 3rd party and are a VIE
FIN 46R defines a VIE as having one or more of the following characteristics
The Owner's equity investment is not sufficient to permit activities without additional subordinated financial support provided by other parties
Equity investment less than 10% of total assets qualifies
The Owner's equity investment lacks usual voting rights, the obligation to absorb losses or the right to receive residual returns
The Owner's voting rights are large compared to their small investment in the VIE and most activities are conducted on behalf of an investor with a much smaller voting interest (the Administrator)
FIN 46R currently requires consolidation by a party that holds a majority of the risks of the VIE
The consolidation decision is made based on a quantitative analysis of the expected losses of the VIE
The bank, by employing a 3rd party to bear the majority of risk in the conduit, currently does not have to consolidate the conduit on their balance sheet
Amended FIN46R
The current quantitative analysis of a VIE's (the conduit's) expected losses to determine whether or not it will be consolidated on the balance sheet under FIN 46R will be changed to a qualitative analysis to determine consolidation
Instead of identifying the party that bears the majority of the VIE's expected losses as the consolidating party, the analysis will now look at the primary beneficiary of the VIE (the bank) as well to determine consolidation
This qualitative analysis will say a company must consolidate a VIE if they have:
Under the proposed methodology, the conduit would qualify for consolidation on the bank's balance sheet because:
The Bank acts as the servicer/administrator for the conduit
The Bank has the power direct matters that significantly impact the success of the conduit
Liquidity facilities and owned interest in the conduit by The Bank will likely qualify for consolidation
The Bank would likely absorb significant gains or losses from the conduit
Hope that heps man.
I work as an auditor, I just happen to have one client who hits the Fin46R and Fin48 requirements.Originally Posted by swizzc
ya, i only looked into it with regards to banks.. what line of work are you in?Originally Posted by LazyJ10
If it pertains to a bank, I think that's different...typically, Banks and Insurance companies have their own criteria whereas other companies don't. I had to do enough analysis for Partnerships and LLCs, so I don't think much has changed in that regard.Originally Posted by swizzc
This is from a pitchbook i did this summer (changed the name of the bank I worked for to "The Bank" and their ABCP conduit to "the conduit") so bear with me...
Old FIN46R
FIN 46R is a statement from the Financial Accounting Standards Board pertaining to the consolidation of VIEs
A VIE is a distinct type of SPE that does not qualify as a QSPE
Most banks conduits (what they sell the CP for these assets through) are owned by a independent 3rd party and are a VIE
FIN 46R defines a VIE as having one or more of the following characteristics
The Owner's equity investment is not sufficient to permit activities without additional subordinated financial support provided by other parties
Equity investment less than 10% of total assets qualifies
The Owner's equity investment lacks usual voting rights, the obligation to absorb losses or the right to receive residual returns
The Owner's voting rights are large compared to their small investment in the VIE and most activities are conducted on behalf of an investor with a much smaller voting interest (the Administrator)
FIN 46R currently requires consolidation by a party that holds a majority of the risks of the VIE
The consolidation decision is made based on a quantitative analysis of the expected losses of the VIE
The bank, by employing a 3rd party to bear the majority of risk in the conduit, currently does not have to consolidate the conduit on their balance sheet
Amended FIN46R
The current quantitative analysis of a VIE's (the conduit's) expected losses to determine whether or not it will be consolidated on the balance sheet under FIN 46R will be changed to a qualitative analysis to determine consolidation
Instead of identifying the party that bears the majority of the VIE's expected losses as the consolidating party, the analysis will now look at the primary beneficiary of the VIE (the bank) as well to determine consolidation
This qualitative analysis will say a company must consolidate a VIE if they have:
Under the proposed methodology, the conduit would qualify for consolidation on the bank's balance sheet because:
The Bank acts as the servicer/administrator for the conduit
The Bank has the power direct matters that significantly impact the success of the conduit
Liquidity facilities and owned interest in the conduit by The Bank will likely qualify for consolidation
The Bank would likely absorb significant gains or losses from the conduit
Hope that heps man.
