Securities Law Prof Blog

Editor: Eric C. Chaffee
Univ. of Toledo College of Law

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Monday, November 26, 2007

CDOs and Off-Balance Sheet Accounting Treatment

Off-balance sheet accounting treatment is receiving increased attention in the face of Citigroup's $41 billion invested in CDOs.  Accountants debate whether action taken by Citigroup over the summer to shore up their holdings constitutes a "reconsideration event" that would require placing these securities on the balance sheet.  More generally, it raises the Enron question of whether investors are adequately informed of the risks when there is off-balance sheet treatement of complex instruments.  WSJ, Citi's $41 Billion Issue: Should It Put CDOs On the Balance Sheet?

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