Banks hid $35 billion in write-downs

Several investment banks have failed to disclose a total of $35 billion in write-downs on their income statements, according to Bloomberg News.
Accounting rules allow financial organizations to report losses incurred by long-term assets, such as bonds, on their balance sheets instead of their income statements, allowing some banks to hide the full extent of the losses they have incurred due to write-downs, Bloomberg reported.

Among those entities failing to disclose write-downs on their income statements are Citigroup Inc. of New York. The investment bank, which has already reported $40.9 billion in losses tied to write-downs tied to the subprime meltdown, failed to disclose another $2 billion in write-downs it reported to the Securities and Exchange Commission.

Merrill Lynch & Co. Inc. of New York, which has disclosed $31.7 billion in credit losses, has incurred another $5.3 billion that it kept off its income statement.

Washington Mutual Inc. of Seattle, which has suffered $8.3 billion in losses tied to subprime holdings, has withheld disclosing $0.8 billion.

These previously undisclosed write-downs follow on the heels of the devaluation of $344 billion in assets through write-downs and credit losses throughout the banking industry.