Oireachtas Joint and Select Committees
Wednesday, 25 February 2015
Committee of Inquiry into the Banking Crisis
Context Phase
Professor Eamonn Walsh:
In terms of accounting for the assets involved, when we lend money to a customer we record basically the amount that was lent as an asset. The accounting is then done in such a way that we must wait for an impairment to occur which means it is not reflected on the balance sheet.
There are other disclosures. For example, the fair value of the loans. Currently, banks have a footnote where they disclose the fair value of those loans, namely, the price they believe that an unrelated third party would pay for those assets in an arm's length transaction.
No comments