Shadow accounting for investment sweeps

Article Abstract:

Investment sweeps were introduced by banks in the early 1980s as a way to invest the idle cash of customers because regulations do not allow them to pay interest on commercial checking accounts. These sweep services usually transfer funds from a commercial checking account and invest them on an overnight or short-term basis. Although these sweeps help satisfy the needs of customers, they also present banks with the problem of losing important balance sheet deposits. As a solution, banks should consider using shadow accounting within their investment sweep program. This approach can measure the true funding or deposit position of banking line units, shadow sweep funds in the general ledgers of banking line units, allow funding credit on sweep investments to banking line units and move sweep interest expense to banking line units. Moreover, it can be used to control centralized investment balance reports and remove shadow entries for reporting.

Management, Sweep accounts

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Brand names: the invisible assets

Article Abstract:

The recognition that brand names are valuable assets has raised the question of how they should be recognized in financial reports. Top brands sell at a premium to other brands, and the difference in selling price, assuming production costs are similar, represents one way of measuring a brand's value. Another brand valuation method is 'relief from royalty', the amount a third party would have to pay to use the brand name. Relief from royalty uses only three variables: discount rate, royalty rate, and future revenue, but it is often difficult to find comparable licensing agreements for the purpose of valuation.

Analysis, Accounting and auditing, Brand name products, Brand names, Valuation, Goodwill (Business)

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