Fannie Mae-No Politics (FNMA)

[Phisherman]

Fannie Mae to write down key capital component/b]
10/29 10:37 AM
NEW YORK, Oct 29 (Reuters) - Fannie Mae (FNM:$0.9201,$0.1301,16.47%) , the largest provider of funding for U.S. home mortgages, on Wednesday said it will likely write down "substantially all" of a tax-related asset that has been a key component of capital.
Companies can use deferred tax assets as a way to offset future taxes, but must be able to show they will be profitable.
Accounting for deferred tax assets became controversial for Fannie Mae (FNM:$0.9201,$0.1301,16.47%) after the company posted a string of surprising quarterly losses, which hamstrung its ability to raise capital to offset losses from rising foreclosures. Capital concerns at Fannie Mae (FNM:$0.9201,$0.1301,16.47%) and rival Freddie Mac eventually led to their seizure by the U.S. government in September.
Fannie Mae's (FNM:$0.9201,$0.1301,16.47%) deferred tax assets totaled $20.6 billion as of June 30. One analyst said the amount is likely to be larger for the third quarter.
Treatment of the assets is a focus of class-action lawsuits filed against Fannie Mae (FNM:$0.9201,$0.1301,16.47%) that charge the company was concealing its capital deficiency. (Reporting by Al Yoon; Editing by Andrea Ricci)