Jan 25, 2022·edited Jan 25, 2022

Ok, so I've read your posts on the nuts and bolts of the accounting reasoning and quadruple accounting elsewere, but the treatment of derivatives under this framework still confuses me a bit. Take the TRS (total return swap) example here for instance: I get the economic exposure treatment "swap can be understood as matched parallel loans", and I get why you combined the loans into a single swap contract on Archegos' asset side. What I don't understand is since balance sheets should balance, what liability entry on Archegos' liability side corresponds to the TRS recorded as an asset?

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"Soon parted" is fascinating. A high-level didactic tool.

Each entry is the key to an understanding of an apparently complex world that, thanks to the explanations and its illustration through the stylized T-accounts, becomes understandable.

Gracias y felicidades. Iñigo

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