Clash continues in US over fair value

A conflict has emerged between the the US standard setter FASB and one of its own advisory board over measures to soften the principles of fair value accounting.

FASB's technical advisory committee - set up to represent investor interests - has written to FASB claiming changes it made to the accounting for securitised financial instruments are 'without any clear articulation of benefits for the investing public'.

The letter, reported by FinancialWeek.com, was written by Jack Ciesielski, a committee member and owner of investment advisory firm RG Associates, and focuses on the decision to allow companies to exclude from their earnings the outcome of impairment tests for financial instruments held for sale.

The clash comes as the latest round in the ongoing tussle over fair value accounting in the credit crunch.

Ciesielski wrote: 'The additions of this item to the board agenda at this time, coupled with an unusually limited comment period, gives the appearance that both the commission and the board have conceded to the wishes of a vocal industry group, to the detriment of investors.'

No fair value suspension in the US, SEC urges