Traditional tests of solvency remain unchanged, but a much more comprehensive approach is required. The fast changing financial crisis means there is no legacy answer as to when a firm is solvent. Some of the determinants have changed. As we assess the solvency of our clients in 2009, we face these new challenges through research, innovation, and conventional solvency tests.
In this article, we summarize each of the solvency tests and discuss some of the factors that make them more challenging in today’s economic climate.
Responding to allegations of model errors: SEC enforcement trends