I was just perusing a Moody’s report here on standard adjustments that they make.

I was somewhat surprised that they reverse the impact of the changes in a company’s (well in the case of the report i’m reading, a BANK’s) own credit risk on current period gains or losses related to the FV of their own debt. (The do a similar adjustment for the B/S.)

I’m sure you’ve all ready Bob Lipe’s article in Horizons on how there are probably also corresponding losses on assets that are occurring at the same time (so the fv credit quality “gain” is offset by those losses).

I was surprised by this adjustment of Moody’s as I don’t think they make the adjustment for assets write-downs…

Bob Lipe???