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’.

Further reading:

the Financial Week story

roundtable clash over fair value

Related reading

Fiona Westwood of Smith and Williamson.