FASB board member urges fair value changes

Fair value accounting rules introduced in the US require a 'post mortem' according to one member of the standards setting board.

Financial Accounting Standards Board member Thomas Linsmeier said that fair value accounting introduced in FAS 157 last November may need modification following widespread concerns from investors over the rules' effects that companies are not disclosing enough about complex securities, reported Financial Week.

At an SEC conference in Washington, Linsmeier said: 'We really do need to do a post-mortem by looking at annual disclosures during the rule’s baptism by fire. If there’s a problem, is it with how we wrote the rule or how it’s applied?'

The rules had come under heavy fire elsewhere at the conference with James Tisch, chief executive of Loews claiming the rules would ' destroy the notion of the income statement'.

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