RegulationAccounting StandardsClash continues in US over fair value

Clash continues in US over fair value

Standard setter attacked for changes to accounting for financial instruments

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

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