Here’s a fascinating note on accounting rules from a recent Hussman commentary:

…Following the Enron blow-up, the Financial Accounting Standards Board banned an accounting practice that Enron had used to book expected future profits as earnings, immediately, at very the moment it made an investment. In February of this year, the FASB effectively reversed itself in a rule that re-admitted the practice.

Perhaps not surprisingly, the buyout firm Blackstone Group has now filed for an initial public offering of shares. Blackstone is expected to apply the new accounting rule to immediately book the management and performance fees it expects to receive on long-term deals involving private companies, to which it may also apply its own fair value estimates. As the Wall Street Journal quoted Jack Ciesielski of the Accounting Analyst’s Observer, ?This is a black box if there ever was one.?

I wonder if I could do that when applying for a loan…? you know, claim all my income for the next three years of my job today so I can qualify for a bigger home mortgage…? brings a new meaning to the term liar loans, no?