IASB forms group to tackle ‘fair value’ issue

The International
Accounting Standards Board
(IASB) is establishing another working group,
which will examine the problems of valuing securities in illiquid markets, and
has sent out invitations to senior bankers and regulators.

Financial institutions have recorded more than $300bn of write-downs, many
hitting profits directly as market seizures have caused prices to plummet. For
many, values are expected to be at least partly written back up as markets
recover, according to the Financial Times.

The Financial Stability Forum, an international grouping of central bankers
and regulators, asked IASB to look into the problem as ‘fair value’ accounting
had many alarmed at the size of the write-downs.

The first of a series of meetings will be held in London on June 13 and will
discuss the scope of the project. But the format of the meetings, which will
take place behind closed doors, is said to have already angered some accounting

Further reading:

Leading banks petition for relaxation of fair value

the Financial Times story

Related reading

Fiona Westwood of Smith and Williamson.