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Newcastle, RAIT Financial: The Long Case for REITs

Fair Value adjustments for liabilities is an improvement that will soon be required of all U.S. companies the way it is for foreign companies today. FASB will soon require it. Migration has been underway since 2002.

The application of Fair Value does not imply any need to repurchase the liabilities. It does however give a much better current value of the company when comparing asset values that are required to be marked to market value.

The NCT $1.3bn from the sale of assets was used to pay down liabilities. The liabilities were not paid off at face value. The liabilities were paid off at market value.