Wednesday, October 21, 2009

New Rules Clobber Citibank

Citibank may be asking for more taxpayer aid in the near future because the Financial Accounting Standards Board (FASB) has issued a new rule (No.166). Citibank says the new rule will have a significant effect on its consolidated financial statements going forward. According to the bank it will loose sales treatment for certain assets it sold to "qualifying special purpose entities". These entities are used by banks to move bad assets off their books. The bottom line is next year an after tax charge of $8.3 billion to retained earnings will have to be made.