U.S. accounting rule makers met yesterday to consider expanding mark-to-market accounting rules to loans and other securities, moving ahead with a plan already strongly opposed by banks. The U.S. Financial Accounting Standards Board (FASB) is in the early stages of discussing a proposal that could require nearly all financial instruments to be recorded at market value on corporate balance sheets and recognize changes to those values in earnings. The FASB is expected to release a formal proposal, or “exposure draft,” on the changes in the first half of 2010, said Reuters. The FASB discussed how companies might show differences between realized and unrealized gains on financial instruments; how management’s view of credit could be incorporated compared with the market’s view; and whether mark-to-market accounting could improve the accounting for purchased loans. FASB Chairman Robert Herz said at the meeting the FASB has a long process ahead of it and did not expect real changes to be in place before 2011. “We are taking a very measured and comprehensive approach to this complex issue and have many discussions and roundtable meetings ahead before an exposure draft will even be created,” FASB spokesman Neal McGarity.
FASB Considers Expanding Mark-to-Market
FASB discussed how companies might show differences between realized and unrealized gains on financial instruments.
August 14, 2009