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Balancing Alaskan banks.


In accounting terms, a bank's value at a given point in time is determined using the balance equation assets = liabilities + equity.

Assets are items owned by a bank that add value to the company. Assets typically include cash, receivable balances from depository institutions, securities, federal funds sold, receivable loans and leases, trading assets, fixed assets, subsidiary investments, real estate and intangible assets (i.e. goodwill).

Liabilities are bank obligations owed to other parties due to past transactions. Liabilities consist of all interest and non-interest bearing deposits, federal funds purchased, trading liabilities, executed and outstanding acceptances, and subordinated notes and debentures.

Equity is the capital remaining after the fulfillment of liability commitments. It is the portion of assets available for use by bank owners. Equity includes perpetual preferred stock, common stock, surplus income, retained earnings, and other accumulated comprehensive income.

Source: Alaska Department of Commerce, Community, and Economic Development Division of Banking and Securities,
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Title Annotation:Alaska Trends
Author:Steffens, Michelle
Publication:Alaska Business Monthly
Date:Nov 1, 2008
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