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ACE Limited Message Board

  • sgcman1 sgcman1 Aug 18, 2005 11:13 PM Flag


    So I was just looking at the restated financials again and noticed something pretty suspicious.

    Essentially, I noticed that "tangible" equity dropped by a meaningful amount (something like a few hundred million) but total equity was unchanged (the $1 million difference).

    However, when I read the footnotes and listened to the commentary on this, it was pointed out that the only difference between the two is goodwill (which we all know has no real value).

    When asked about this, Evan, Bancroft, and crew essentially said that since the relevant transactions occurred before the CIGNA purchase, then the goodwill that was posted at the time of the purchase "would have been larger".

    In other words, the amount that they booked to offset the amount that they overpaid for CIGNA would have been larger because CIGNA was actually worth even less than they thought at the time !!

    Of course, when asked about the statutory impact of the restatement (since goodwill is not allowed in statutory accounting), they declined to provide this information but claimed it "would not be material". However, its pretty obvious that the reduction will be at least equal to the reduction in tangible equity.

    Is it just me, or are our friends at ACE not being very forthcoming.

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