IASB to consider US changes to fair value
More freedom for banks in valuing financial assets
The International Accounting Standards Board is to consider following its US
counterparts lead in easing fair value accounting rules.
The US Financial Accounting Standards Board (FASB) is proposing to allow
banks more freedom in the way they value financial assets. There would be more
emphasis on using computer models rather than daily quoted prices where no
active market is said to exist for a particular security.
In the US, a rule change could be brought about as early as April. The IASB
will first put out two papers released by the FASB for comment to users of its
standards in more than 100 countries.
The IASB has already softened its own fair value rule last autumn under
pressure from the European Commission.
According to
CFO.com
there was tension during the last IASB board meeting over the quality of the US
approach.
The US proposals give guidance on judging whether the market for a particular
financial instrument is active – a controversial subject during the current
economic crisis.
Further reading:
Setting
accounting standards away from interference
Don’t
mix politics and standards, says Haddrill