HiMonoline insurers booked profits during the financial crisis on their liabilities.Does anyone know what the accounting treatment for this was?Thank you

Beginning in the 1970s, municipal government bonds were insured by bond insurers, also known as the ?monolines.? The global financial crisis of 2008 seriously harmed their business model, to the point where the continued operation of a number of bond insurers is in doubt. (http://en.wikipedia.org/wiki/Bond_insurance)How did they book profits?

I was inclined to make the same comment, namely, that I thought at least some of the monolines went bankrupt.What the poster might be getting at is how the accountants treat DVA in general. When a firm's credit worthiness decreases, the spread on its liabilities widen and the prices fall. So, in principle, these liabilities could be bought back by the issuing firm at a discounted price. The idea of DVA is to quantify the size of the potential savings. A logical problem with DVA, at least as I see it, is where would a firm come up with the money to buy back its liabilities if the firm is indeed in trouble? If they had to borrow the money it would have to pay the higher spread and this would be essentially robbing Peter to pay Paul. In this case DVA only makes sense in the context of the break-up value of a firm, not as a going concern. Having said this, I suppose if equity holders ponied up the money to buy back the discounted credit-impaired liabilities then DVA might make more sense. Anyone else want to weigh in?

I know that profits were booked by a US IB due to the credit spread widening. It was a boon I can tell you when everything else was going down the plug hole.