December 30, 2008 | 3:55 pm

Yeshiva University revises losses to $14.5 million

Posted by Brad A. Greenberg

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Two weeks ago, Yeshiva University President Richard Joel wrote in a letter to the YU community that the New York college had lost $110 million in investments made with Bernard Madoff. Today YU drastically recharacterized its losses as only $14.5 million. Why the massive mark down?

“Although the university has an estimated loss of approximately $110 million, it now appears that any ‘profits’ above the $14.5 million were fictitious,” Gower said in the statement.

Ascot was controlled by J. Ezra Merkin, who resigned from his positions as a trustee and investment-committee chairman. Madoff, 70, who served as treasurer of Yeshiva’s board of trustees and chairman of the school’s Sy Syms School of Business, resigned from his positions.

Partly because of Madoff, Yeshiva’s endowment value fell to $1.2 billion, from $1.7 billion last Jan. 1, the school estimated on Dec. 16.

The Jewish Community Foundation of Los Angeles also has chosen to focus on how much it had invested with Madoff ($18 million) and not how much it believed that investment was worth ($25.5 million). But sticking to the smaller investment doesn’t mean YU only lost $14.5 million. Think of it this way:

Let’s say you put $10,000 in the bank. Over a few years, that investment grows to $15,000. You’re up $5,000 but if your account was wiped out, you’d wouldn’t be down $10,000—you’d be down $15,000.

Losses on paper are still losses, especially if those “fictitious” profits have been used in planning for future spending.