Lagarde calls for changes to fair value accounting

France’s finance minister Christine Lagarde has said she would like to see
amendments to international accounting standards on mark-to-market rules.

Her comments were made in an interview with the
and come just weeks before France takes up its EU presidency on 1st

Lagarde is to meet City financiers later today to discuss measures to help
restore financial stability.

The French are amongst the most vociferous critics of fair value rules. There
has been intense debate around the accounting in recent months, with some
claiming the rules have accentuated downward spirals in asset values.

The International Accounting Standards Board said it was unable to comment
about Lagarde’s controversial remarks.

However, it confirmed that its
advisory panel
, which includes the Big Four and major investment banks, met
for the first time last week to discuss issues such as valuations in an
‘illiquid’ market.

The IASB believes that opposition to fair value is localised and is reluctant
to bow to pressure to make changes.

Further Reading:

the FT interview

Related reading

Fiona Westwood of Smith and Williamson.