Fair Value overhaul rejected by IASB body

A standards body tasked with reviewing fair value guidance in the wake of the
credit crunch has announced that it does not require an overhaul.

The group was put together through the International Accounting Standards
Board in an effort to confer on how best to resolve the question of valuations
of hard-to-price assets whose markets have become inactive.

The experts said large banks had understood and applied the rules well while
smaller ones were inexperienced in valuations during crisis periods.

Several investment banks slammed the rules which they say exacerbated the
credit crisis, with more than £250bn wiped off balance sheets since the crunch
began in the fourth quarter of last year. The IASB has also issued a draft
report of a summary of the panel’s views.

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Fiona Westwood of Smith and Williamson.