RegulationAccounting StandardsIIF backtracks on fair value view

IIF backtracks on fair value view

'There is a view that [to apply] new techniques, or greater flexibility, in current circumstances would be fraught with difficulties.' - IIF

The global banking alliance which called for a relaxation of fair value rules
has clarified its position on the standard after it caused a stir among some of
its members.

The Institute of International Finance, which represents the world’s leading
banks, this week said: ‘There is a view that [to apply] new techniques, or
greater flexibility, in current circumstances would be fraught with
difficulties.’

The IIF had earlier claimed in a paper – sent to governments and regulators –
that taking prices in illiquid markets ‘results in valuations that do not
provide a true picture of the financial positions of the firms’.

Following the publication of its position in a report, Goldman Sachs
distanced itself from the group and threatened to leave the IIF, referring to
the proposals as ‘Alice in Wonderland’ accounting.

Further reading:

IIF report urges accounting rule changes

Leading banks petition for relaxation of fair value

IASB forms group to tackle ‘fair value’ issue

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