Financial Instruments and Institutions: Accounting and Disclosure Rules [Hardcover]

Stephen G. Ryan (Author)

Book Description

ISBN-10: 0470040378 | ISBN-13: 978-0470040379 | Publication Date: April 20, 2007 | Edition: 2

This book is an authoritative guide to the accounting and disclosure rules for financial institutions and instruments. It provides guidance from a “fair value” perspective and demonstrates the simplest and most natural measurement basis for reporting financial instruments, as is relevant for thrifts, mortgage banks, commercial banks, and property-casualty and life insurers.

Editorial Reviews

From the Inside Flap

Financial Instruments & Institutions

Accounting and Disclosure Rules

Second Edition

Financial reporting for financial instruments and institutions is undergoing a period of unprecedented change and relevance for financial analysis. In the past decade, the Financial Accounting Standards Board (FASB) has issued major standards on derivatives and hedging, transfers of financial instruments including securitizations, servicing of financial assets, consolidation of special purpose/variable interest entities, hybrid financial instruments, financial guarantees, and fair value measurements.

Now in a Second Edition updated to reflect the many significant changes in financial reporting rules, regulations, and economic conditions that have occurred since the publication of the first edition, Stephen Ryan's Financial Instruments and Institutions: Accounting and Disclosure Rules provides users and preparers of financial reports with the tools necessary to construct as coherent a story as possible about how firms generate or destroy value using financial instruments.

This book equips professionals to fully exploit the various sources of information about the fair value and risks of financial instruments and explains how "fair value" provides the most natural measurement basis for reporting financial instruments. It contends that users of financial reports do not need to know all of the myriad details involved in each financial reporting rule, but rather only the critical features that make or break the representational faithfulness of the reports.

Precise, clear, and helpful, Financial Instruments and Institutions, Second Edition examines six types of financial institutions in detail:

• Thrifts

• Mortgage banks

• Commercial banks

• Lessors

• Property-casualty insurers

• Life insurers

These institutions were chosen because each reflects specific financial transactions in a clear fashion and/or because each has distinctive accounting or disclosure requirements. Financial Instruments and Institutions describes the activities and risks of each in an economically grounded yet intuitive fashion, using numerous cases from actual financial institutions' financial reports to illustrate when fair value accounting for financial instruments works well and when it is fragile.

From the Back Cover

Praise for Financial Instruments & Institutions Accounting and Disclosure Rules, Second Edition

"Financial Instruments and Institutions is a superbly informative integrated treatment of institutional, analytical, and financial reporting issues for financial institutions. I strongly recommend the book for analysts, investors, regulators, educators, and anyone with an interest in a coherent, intellectually rigorous discussion of issues encountered in reporting on and analyzing financial institutions and their commercial arrangements, including fair value measurements, risk reporting, and structured finance."
—Katherine Schipper, Thomas F. Keller Professor of Business Administration, Duke University

"When you combine the unique risk attributes of financial institutions with the complex transactions they enter into, it can make even the most seasoned investor shudder. Dr. Ryan provides a well-structured and logical approach to the analysis of these companies, layering on explanations of the transactions they enter into and how they impact your analysis. Seasoned investors will find the book an important reference tool, especially on securitizations and derivatives and the new chapter on reinsurance."
—Janet L. Pegg, CPA, Accounting & Taxation Research, Bear, Stearns & Co. Inc.

"Stephen Ryan's book is indispensable for anyone involved with financial institutions, whether it be bankers, insurers, investment advisors, or the student. There is no better book for understanding how these institutions work and how one handles their financial statements to gain that understanding. The detailed coverage of financial instruments—and the accounting for financial instruments—is outstanding."
—Stephen Penman, George O. May Professor and Morgan Stanley Research Scholar, Columbia Business School

Praise for the First Edition

"To any professional engaged in hands-on analysis of financial institutions' financial statements, this exhaustive text is an indispensable resource."
—Martin S. Fridson, CFA, Financial Analysts Journal

See all Editorial Reviews

Product Details

• Hardcover: 528 pages
• Publisher: Wiley; 2 edition (April 20, 2007)
• Language: English
• ISBN-10: 0470040378
• ISBN-13: 978-0470040379
• Product Dimensions: 9.2 x 6.3 x 1.6 inches
• Shipping Weight: 1.9 pounds (View shipping rates and policies)
• Average Customer Review: 4.3 out of 5 stars  See all reviews (3 customer reviews)
• Amazon Best Sellers Rank: #433,345 in Books (See Top 100 in Books)

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Customer Reviews

Most Helpful Customer Reviews

12 of 12 people found the following review helpful:

5.0 out of 5 stars Mix of Finance and Accouting, November 21, 2002

By 

hs (New York) - See all my reviews

This review is from: Financial Instruments and Institutions (Hardcover)

~~~~~You are wrong if you think that this is a pure accounting or finance book. I am taking Profoessor Ryan's class of "Finanial Instruments and Financial Institutions" in NYU right now. The stength of Professor Ryan in the book is his in-depth understanding and effective description of economics, finance and accounting issues. So many case studies covered in the book blend with macroeconomic events, financial implication and accounting disclosures. Therefore, you need some background~~ knowledge of accounting and finance to fully take advantage of his insights in the book. This book discusses the yield curve, interest risk, credit and market risks, and fair value accounting for financial instruments. It analyzes the finacial and accounting issues for thrifts, mortgage bank, securitizations, commercial banks, derivatives and hedging, lessors and lease accountings. After reading through the book, you will have clear pictures about each finnancial instruments and institutions.~~ You won't be afraid of these topics any more. This book can be used as an advanced textbook for finance or accouting majors in business school, or a reference book if you are interested in financial and accounting issues of the above topics.~

3 of 3 people found the following review helpful:

5.0 out of 5 stars Authoritative and well written, June 2, 2007

By 

L. Kim - See all my reviews
(REAL NAME)   

This review is from: Financial Instruments and Institutions: Accounting and Disclosure Rules (Hardcover)

The chapters are written in an organized fashion with a strong introduction allowing for the readers to re-familiarize themselves before reading (moving onto) the more dense material. The topics covered require readers to be familiar with some of the basic accounting principles beforehand. However the introduction allows for readers to continue onto the denser, less familiar topics without much difficulty and pain. The topics require dedication (as indicated by another review) on the part of the readers in order for mastery--but this is due to the nature of the topics covered rather than the writing. The examples used allow for readers to gain exposure on how the principles apply in context--which is a definite plus.

The book gives insights on accounting topics never fully explored in the typical undergraduate or graduate business education--the importance of the quality of disclosures and what can be mined from those financial statements was truly a surprise for me. The author's insights and thoughts on current accounting issues and belief in fair value accounting were convincing and well supported.

The material is not user-friendly in the fact that it requires a certain amount of exposure and knowledge in areas such as financial disclosure, basic economics/finance etc. The writing style is user-friendly as it engages readers in its conversational approach.

3 of 3 people found the following review helpful:

3.0 out of 5 stars Good in small doses, August 17, 2005

By 

Karan Mehta (New York, NY) - See all my reviews
(REAL NAME)   

This review is from: Financial Instruments and Institutions (Hardcover)

I too have taken Prof. Ryan's class at NYU Stern. The accounting department at Stern is very good (especially Dan Gode) and Prof. Ryan is no exception. He know's his subject very well, take that as a given, and the book is an expression of that thoroughness.

Fair value accounting is well covered and there is a clear vein running through the book that pertinently questions what the right method of accounting should be in various contexts. A wide range of topics are covered and some are explored with more insight and depth than any other accounting book I have seen.

Had the book been better laid out, with more concise and pertinent examples it would have reached four stars. The style of writing is heavy and only the most dedicated readers will be able to sustain themselves through it. Presentation as a result is dry and wordy and, frivolous as it may sound, cries out for more color and visual organization. The publisher really dropped the ball should have recognized this and made the book more accessible, doing so would have given it near cult status for students, investors, analysts and academics.