Volume 9, No. 12

Derivatives Accounting Distilled:  SFAS 133's Workings:  Before the dot-com rage, there was another financial mania: derivatives, which were also viewed by the masses as a way to spin gold out of thin air. In the mid-nineties, the topic of derivatives surfaced on the covers of mainstream news magazines, in every financial newspaper, and even on late night talk shows. Nearly always, the buzz centered on the dark side of derivatives: the possibility that the huge leverage they contained might sink the companies that used them. And plenty of evidence surfaced showing just how dangerous they could be in the wrong hands: witness Orange County, Procter & Gamble and Barings, to name a few.

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