Rubik's Cube Accounting

Vivid dreams about Rubik's cubes and accounting woke me with a start last night.  In my dream, someone had just invented a 3-D accounting tool based on the Rubik's Cube.  I was sitting at a formica table under a fluorescent light across from a man in a brown suit watching a demonstration.  It was amazing and a neat way of fitting several "realities" together so they matched on all sides.  As well,  they could be linked to other cubes though sometimes that caused unforseen shifts...

Since when has Missmc ever concerned herself with accounting?  The only logical source for this dream might be either this or this.  The first This concerns itself with accounting changes that are available to Apple that might just make it look much more rosy for them.  The second This is not accountancy per se but is in effect, a way of looking at how things are going.  And they appear to be going nowhere in this article about idle cargo-less ships parked off the coast of Malaysia.  

The dream progressed to that part where the Rubik's cube accounting man was proposing that Q1, Q2, Q3 and Q4 be customized and given names rather than Q's.  He proposed that  companies ought to give evocative titles to each quarter before they happened and then try to fit the reporting in to match.  That would replace the numbers with a "story" and make for much better annual report reading.  Imagine...

Q1 - "Making Worlds" (ht Daniel Birnbaum)

Q2 - "The Texture of Time" (ht Nabokov) 

Q3 - "Perception and Paradise"

Q4 - "Expanding Horizons"

Well.  The mind runs with possibilities and shaping references abound.  There is sound evidence from all this that I would make a most unsuitable accountant!  But creativity is helpful in the most unlikely places...

Do accounting changes make economic changes?

This seems like old non-news to me, but here is an article on Bloomberg regarding AIG's credit default swaps and the ongoing risks of such things.  

An excerpt:

The $192.6 billion figure for the swaps is comprised mostly of $99.4 billion tied to corporate loans and $90.2 billion linked to prime residential mortgages, the insurer said in a May 7 filing. The combined total was reduced from $234.4 billion on Dec. 31.

Most of the home loans tied to the European swaps are first-lien mortgages for owner-occupied properties, the insurer said in March. The other transactions include secured and unsecured corporate loans.

The fair value of the derivative liability was $393 million as of March 31, compared with $379 million on Dec. 31, according to AIG filings.

But I think the new news part of it has to do do with the reclassifying of the reporting of these securities as "risks".  I could be wrong as the article is a bit shy on nitty-gritty-detail.  Missmc is confused because the last she heard on the topic was that the diminished value of these securities did not have to be accounted for as losses by the banks if they were held to maturity.  And that might be why Citigroup is still alive.  Murky murky murky complex changes.  Do accounting changes make economic changes?

When the loss is lost (but you can't say that), it is risk.  It does all make sense, but, only theoretically.