The Reverse Side Effects of Mark to Market Accounting: Exista and the Saga of Leveraged Paper Profits

Mar Wolfgang Mixa, Murray Bryant, Olaf Sigurjonsson

    Research output: Contribution to journalJournal articleResearchpeer-review

    Abstract

    We describe holding companies and their main roles. We follow up by describing the spectacular development of the investment company, Exista. We then discuss how the difference in fair value methods and equity methods may provide a false picture of the state of companies. This applies especially to different types of holding companies. Our paper shows an example of one that people generally perceived as being a financial company when in reality was more like an investment company, in this case a highly risky and leveraged one.
    We describe holding companies and their main roles. We follow up by describing the spectacular development of the investment company, Exista. We then discuss how the difference in fair value methods and equity methods may provide a false picture of the state of companies. This applies especially to different types of holding companies. Our paper shows an example of one that people generally perceived as being a financial company when in reality was more like an investment company, in this case a highly risky and leveraged one.
    LanguageEnglish
    JournalInternational Journal of Critical Accounting
    Volume8
    Issue number5/6
    Pages463-477
    ISSN1757-9848
    DOIs
    StatePublished - 2016

    Bibliographical note

    CBS Library does not have access to the material

    Keywords

    • Investment firms
    • Holding companies
    • Fair value accounting
    • Mark to market accounting
    • Iceland
    • Equity methods
    • Exista
    • Leveraged paper profits
    • Risk

    Cite this

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    abstract = "We describe holding companies and their main roles. We follow up by describing the spectacular development of the investment company, Exista. We then discuss how the difference in fair value methods and equity methods may provide a false picture of the state of companies. This applies especially to different types of holding companies. Our paper shows an example of one that people generally perceived as being a financial company when in reality was more like an investment company, in this case a highly risky and leveraged one.",
    keywords = "Investment firms, Holding companies, Fair value accounting, Mark to market accounting, Iceland, Equity methods, Exista, Leveraged paper profits, Risk, Investment firms, Holding companies, Fair value accounting, Mark to market accounting, Iceland, Equity methods, Exista, Leveraged paper profits, Risk",
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    The Reverse Side Effects of Mark to Market Accounting : Exista and the Saga of Leveraged Paper Profits. / Mixa, Mar Wolfgang; Bryant, Murray; Sigurjonsson, Olaf.

    In: International Journal of Critical Accounting, Vol. 8, No. 5/6, 2016, p. 463-477.

    Research output: Contribution to journalJournal articleResearchpeer-review

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