A provision in the bill, whose adoption is in doubt after the House of Representatives rejected it Monday, gives the SEC the right to suspend mark-to-market accounting under Statement Number 157 of FASB. The SEC would be allowed to step in front of mark-to-market accounting standards if it was in the public interest and consistent with the protection of investors, the House bill said. Mark-to-market accounting, or "fair-value" accounting, is cited as one of the major reasons for the meltdown in the U.S. banking system. The rule, which went into effect Nov. 15, 2007, forces financial institutions to put a fair value on their assets or liabilities each quarter.
Isn't blaming mark-to-market accounting just a fancy form of shooting the messenger? It's not FASB's fault that banks are carrying assets that ain't worth diddly. That doesn't mean they should be allowed to carry them at cost, or face, or mark-to-fantasy like they did prior to FAS157.
Isn't blaming mark-to-market accounting just a fancy form of shooting the messenger? It's not FASB's fault that banks are carrying assets that ain't worth diddly. That doesn't mean they should be allowed to carry them at cost, or face, or mark-to-fantasy like they did prior to FAS157.
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