Counter effort begins to halt mark to market suspension plan

Counter effort begins to halt mark to market suspension plan

Think tank makes plea for rejection of plans to suspend mark to market as part of rescue package for US economy

US think tank the Centre for Audit Quality has urged Congress to abandon
efforts to suspend mark to market accounting as the proposal continues to play a
central role in rescue plans for the economy in Washington.

The Hank Paulson plan reiterates powers of the US financial watchdog to
suspend mark to market while an alternative rescue package from a Republican
minority group calls directly for suspension.

A CAQ letter addressed to members of Congress says: ‘The principles of mark
to market accounting are rooted in the fundamental virtue of transparency and
are central to informed market decisions and efficient allocation of capital.

‘In our view, investor confidence would be undermined by efforts designed to
mask the actual value of financial assets at a given point in time.’

CAQ insists that mark to market did not cause the crisis but contributed to
knowledge about its severity.

Yesterday, shadow Tory chancellor George Osborne called for the suspension of
mark to market for three months making him the latest politician to believe an
accounting standard is a contributing factor to the financial crisis.

Mark to market has, however, received much support from regulators around the
world. The politicisation of the requirement has gathered pace as business
leaders in ailing institutions have intensified their calls for a change to the
rule.

Currently both the US standard setter FASB, and its internantional
counterpart, the IASB, have projects underway reviewing fair value, though both
have stood by the valuation method emphatically so far.

However, expert observers believe the issue lays in disclosure and
consolidation of the balance sheet rather than valuation under fair value.

More:

Tories
call for UK fair value suspension

Centre for
Audit Quality

Gavin
Hinks’ blog: mark to market madness

Share

Subscribe to get your daily business insights

Resources & Whitepapers

Why Professional Services Firms Should Ditch Folders and Embrace Metadata
Professional Services

Why Professional Services Firms Should Ditch Folders and Embrace Metadata

3y

Why Professional Services Firms Should Ditch Folde...

In the past decade, the professional services industry has transformed significantly. Digital disruptions, increased competition, and changing market ...

View resource
2 Vital keys to Remaining Competitive for Professional Services Firms

2 Vital keys to Remaining Competitive for Professional Services Firms

3y

2 Vital keys to Remaining Competitive for Professi...

In recent months, professional services firms are facing more pressure than ever to deliver value to clients. Often, clients look at the firms own inf...

View resource
Turn Accounts Payable into a value-engine
Accounting Firms

Turn Accounts Payable into a value-engine

3y

Turn Accounts Payable into a value-engine

In a world of instant results and automated workloads, the potential for AP to drive insights and transform results is enormous. But, if you’re still ...

View resource
Digital Links: A guide to MTD in 2021
Making Tax Digital

Digital Links: A guide to MTD in 2021

3y

Digital Links: A guide to MTD in 2021

The first phase of Making Tax Digital (MTD) saw the requirement for the digital submission of the VAT Return using compliant software. That’s now behi...

View resource