| |||||||||||||||||||||||||
| |||||||||||||||||||||||||
The American Bankers Association,
a Washington-based lobbying group, wants the Securities and Exchange
Commission to override U.S. accounting rulemakers' new guidance on
mark-to-market accounting, saying it still relies too heavily on
distressed asset values.
In a letter dated Monday, the bank lobbying group took aim at FAS 157,
which governs fair value or mark-to-market accounting. The ABA claims
that actions taken Friday by the Financial Accounting
Standards Board, "basically ignores" the intent of a joint statement
released by the SEC and FASB Sept. 30, which provided guidance for
companies to value illiquid assets.
FASB issued a clarification of fair value accounting rules Friday, giving an example of how financial firms can value illiquid assets in distressed markets. The FASB ruling urges companies to use their best judgment to value assets that have no active market. "Determining fair value in a dislocated market depends on the facts and circumstances and may require the use of significant judgment about whether individual transactions are forced liquidations or distressed sales," the FASB statement said. But the ABA says FASB has not addressed the problem in a "meaningful" way and requested that the SEC step in and use its statutory authority. "Such action is necessary to meet the SEC's obligation to provide relevant, reliable and useful information to the users of financial statements," wrote Edward Yingling, president and CEO of the ABA, in the letter, addressed to SEC Chairman Christopher Cox. The group said FASB's guidance was "circular" and "refuses to recognize the realities of the current situation" by requiring companies to still evaluate liquidity risk in their calculations. In addition to overriding the guidance, the ABA also wants the SEC to suspend the proposal for securitizations and suspend work by accounting standard setters on any projects that would require fair value pending a review by Congress of the study by the SEC on fair value that's mandated by the Emergency Economic Stabilization Act. - Donna Block See earlier story from Dealscape Donna Block is a senior writer for The Deal. Categories Deal Video
    Community
 Elsewhere on The Deal.comDealwatchThe Deal MagazineCorporate Dealmaker
The Deal VideoCategories
Blog roll
Archives
| |||||||||||||||||||||||||
|
|
|
|
|
©Copyright 2009, The Deal, LLC. All rights reserved. Please send all technical questions, comments or concerns to the Webmaster.
