Presentation Date: Sunday August 2, 2009
  Presentation Time: 1:00 pm-4:30 pm

CPE Session 45

An Overview of Securitization, its Importance to the Economy and the Accounting Issues that Surround Them

Sponsored By: Financial Accounting and Reporting

Presented By:

James R. Mountain, Deloitte & Touche LLP

Stephen Young, Citi

Description: Ever wonder what a subprime mortgage bond, "ABS" or a "CDO" actually is and why these markets exist?

By 2008, almost 60% of all home mortgages and over 25% of other consumer credit originated in the United States was securitized and its challenges are directly responsible for the sharp credit contraction we are observing. This seminar will provide an overview of this market, its structures and key financial reporting issues.

In this interactive seminar, we will provide an overview of the securitization market and explain basis classes of transaction structures. We will then discuss the challenging accounting issues that arise in these transactions, like: when is a sale a sale? Who, if anyone, should consolidate? How should components be measured and how difficult is this? What should be disclosed and when?

Field of Study: Accounting
Program Level: Basic

Intended Audience: Academics and practitioners that are interested in financial instrument accounting issues, off-balance sheet financing, and financial institution issues. More generally, those seeking an understanding of the sharp economic contraction we are experiencing and why the Treasury is seeking to repair these markets will find this seminar interesting.

Format/Structure: Interactive presentation: Slides/teaching with participation encouraged.

Learning Objective: 1. Understand what a securitization is, it's importance in the economy, what has gone wrong and its direct impact on the economic crisis in the developed world. 2. Understand basic structures and transaction types and their economic purpose. 3. Achieve a basic understanding of the fundamental accounting issues and standards impacting securitization markets.

Prerequisites: None

Advanced Preparation Required: None

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