Counsel's opinion, page-25

The accounting standards applied, are applied by the major players in the sector – there is no issue there. The issue is the subjectivity of “Fair Value”. As Biscuit4101 wrote, “. . . using FV creates a black-box that increases risk of abuse . . . I think that PNC management has the integrity to use it properly though.”

The “black box” allows what I call time-shifting – that is, shifting elements, positive or negative, from one reporting period to another, depending on managements' agenda. All companies indulge in time-shifting to a degree, mainly to shift profits to a later time, and thus create a buffer. In the long run, the hidden profits or losses must surface. There are many ways to effect time-time shifting in accountancy, some questioned by auditors, some not.

CCP had its problems surface in about 2008. I understand that it could not collect on the purchased debts as well as earlier predicted. CLH had its problems surface in about 2014, but it was not as severe as CCP's near-death experience. In both cases, earlier years' profits looked rosier than the underlying reality supported. Basically, the earlier overstated profits (credits) were counterbalanced by overstated purchased debt assets (debits). I do not hold PNC and CLH, so I have no need to delve into the mindsets of their respective management teams.

I am out of this conversation, because I have written more than enough on a company in which I have no financial interest in how things transpire. I prefer to focus my attention on companies in which I hold shares, or plan to hold shares.