Accounting for credit risky financial instruments not recognized at observed market value generally involves estimating expected future Credit Risks and Losseswith reference to its“Disclosers”.
Explain this statement “Disclosers”. in your own words with statistical examples of the data from the Saudi Local Banks or Financial Institutions.(Case Study)(1.5 marks)
Answer:
2-Users of financial reports with a robust understanding of “How Fair Value Accounting” works in theory and in relatively simple contexts: How users can analyze the information with context to Local Saudi Banks as well as local financial Institution.“Fair Value Accounting and Disclosures”to assess their
a)Solvency and profitability better than is possible using amortized cost accounting information (use solvency and profitability ratio from balance sheet)
b)Discretionary “Gain Trading” (use disclosures and the assessment of Gain Trading)
Required
a)Calculate Solvency and Profitability ratio from balance sheet of any Saudi Local banks or financial institutions
b)Calculate Gain or Losses from securities – use Saudi Local banks or financial institutions
Sample Solution
