Because of complex methods for valuing certain bonds, Morgan Stanley (MS) will probably lose money in the first quarter.

According to The Wall Street Journal, "Because of the accounting treatment on some bonds issued by Morgan Stanley before the financial crisis erupted, the New York company is expected to take a hit of $1.2 billion to $1.7 billion." It is ironic that gains in the value of the bonds increases the amount MS may owe investors in the paper.

The loss again raises the issues of how complex accounting treatment of financial obligations can muddle the picture of how a financial firm is actually doing. Many of Morgan Stanley's businesses, including brokerage and investment banking, will probably do well for the for 90 days of the year. That will not be lost on more sophisticated investors.

Financial reporting is getting so complicated that the companies may want to ask the government if they can report one set of modified earnings for individual investors and another for institutional holders.

Douglas A. McIntyre is an editor at 24/7 Wall St.