RegulationAccounting StandardsUS financial lobby fights fair value proposal

US financial lobby fights fair value proposal

American Banking Association urges members to battle new rules put forward by FASB

One of America’s most powerful financial lobbies has attacked proposed
accounting measure rules which they say injects “craziness” into financial
statements.

The American Banking Association, which represents the $13 trillion US
banking industry, has urged its members to fight proposed fair value rules put
forward by the US accounting standard setter, the Financial Accounting Standards
Board (FASB).

FASB’s proposal would force banks to measure their loans at current market
prices, which banks argue would promote volatility and is not appropriate for
loans held to maturity.

“This is really a jaw-dropping proposal,” Donna Fisher, senior vice president
of tax and accounting at the Association told CFO.com.

The international fair value model allows banks’ to measure their assets
differently, depending on their purpose. Loans that are held for trading have to
be measured at their market price. Loans held to their maturity date are
measured at amortised cost.

According to FASB, their proposals provided more useful information to
shareholders.

“The objective…is to provide financial statement users with a more timely,
transparent, and representative depiction of an entity’s exposure to risk from
financial instruments,” FASB said.

Related Articles

FASB publishes US leasing standard

Accounting Standards FASB publishes US leasing standard

2y Calum Fuller, Reporter
Extended auditor reports restoring trust in audit in post-HBOS world

Accounting Firms Extended auditor reports restoring trust in audit in post-HBOS world

2y Chris Warmoll, Writer
Hoogervorst says IFRS9 will lead to fundamental change

Accounting Standards Hoogervorst says IFRS9 will lead to fundamental change

2y Chris Warmoll, Writer
IASB calls for one year deferment on IFRS 15 Revenue from Contracts with Customers

Accounting Standards IASB calls for one year deferment on IFRS 15 Revenue from Contracts with Customers

3y Chris Warmoll, Writer
IFRS 9 could hike banks’ loan loss provisioning by 50%

Accounting Standards IFRS 9 could hike banks’ loan loss provisioning by 50%

3y Richard Crump, Writer
IFRS Foundation calls for delay to revenue recognition

Accounting Standards IFRS Foundation calls for delay to revenue recognition

3y Richard Crump, Writer
FASB votes to defer revenue recognition standard

Accounting Standards FASB votes to defer revenue recognition standard

3y Richard Crump, Writer
FASB considers delay to revenue recognition rules

Accounting Standards FASB considers delay to revenue recognition rules

3y Richard Crump, Writer