Reinhart and Rogoff: was Excel the problem?

There’s a bit of a furore going on at the moment: it turns out that a controversial paper in the debate about the after-effects of the financial crisis had some peculiarities in its data analysis. Rortybomb has a great description, and the FT’s Alphaville and Tyler Cowen have interesting comments. In summary, back in 2010 […]

Kodak earnings restatement

In November 2005 Kodak restated its Q3 results by $9 million. The restatement was attributed to restructuring and severance costs, plus a real estate gain. The restructuring costs were apparently because they got the accounting treatment wrong; we were told that “the magnitude of the worldwide restructuring program the company is undertaking imposes significant challenges […]

Project financing spreadsheets

In 2004 a paper on “Financial Modelling of Project Financing Transactions” was presented to the Institute of Actuaries of Australia Financial Services Forum. It’s well worth a read if you are involved in any sort of financial modelling, whether or not you are an actuary and whether or not you are modelling project financing. The […]

RAND() in Excel 2003

It appears that a bug crept into the final release of Excel 2003 that wasn’t present in the betas. The RAND() function in Excel 2003 was apparently upgraded so that it produced a better distribution of pseudo-random numbers between 0 and 1. The trouble is that the numbers it produces may be more random, but […]

Fannie Mae $1.2bn honest mistake

In October 2003, about 2 weeks after releasing their third quarter earnings figures, Fannie Mae had to restate their unrealised gains by $1.2 billion. This was apparently the result of “honest mistakes made in a spreadsheet used in the implementation of a new accounting standard.” Honest mistake or not, $1.2 billion is a lot of […]

TransAlta Corporation

Next time you paste some figures into a spreadsheet, be afraid. Be very afraid. Someone at TransAlta Corporation managed to lose $24m (Canadian) through a “clerical error” in pasting into an Excel spreadsheet. The spreadsheet in question was used to submit bids to the New York Independent System Operator (New York ISO) for May 2003 […]