Fair value suspension would be 'obfuscation'

'Obfuscation' of accounts by suspending fair value is not the way to restore market confidence, an investment group has said.

Writing to the Financial Times, the chair of the CFA society's Accountancy Advocacy Committee Jane Fuller said: 'The message from the investment community is that obfuscation is not the way to restore their precious confidence.'

Fuller said the SEC's clarification had punctured some of the myths about fair value accounting: 'management's cash-flow assumptions can be used to establish fair value and that distressed sales do not represent the "orderly" transaction between "willing" parties required for simple mark-to-market valuations.'

'Politicians should not turn a deaf ear to what the users of accounts want and to the regulators' attempts to help them get it,' she added.

Further Reading:

Fair value: victim of a witch hunt

Read the letter to the FT