An article Thursday titled ‘U.S. nears mark-to-market accounting guidance’ reported U.S. accounting rule makers and regulators said they were pushing ahead with new guidance on mark-to-market accounting, saying Financial Accounting Standards Board (FASB) member Lawrence Smith said Wednesday FASB would ‘in the real short term’ include guidance on whether a market is active or inactive and whether a transaction is distressed.  SEC Chairman Mary Schapiro told Congress she was keeping the pressure on FASB, saying “FASB has committed to us that the guidance will be out in the second quarter”.  The article says the mark-to-market accounting rule is defended by investor advocates, but that the banking industry has pleaded for a suspension or modification of the rule.  The article further reports the SEC and FASB oppose suspension or elimination of the rule, and that Fed Chairman Bernancke is against suspension but called for improvements.  On Thursday before a Congressional hearing the Office of the Comptroller of the Currency said it was inappropriate to suspend the accounting rule.

See my post of yesterday on this subject.  As I have previously said, in my view allowing management subjectivity to assess whether markets are ‘normal’ or ‘not normal’ – which seems to be a mantra of those who want to change the rule – would be a ‘recipe for disaster’ from a ‘reliance on financial statements’ point of view.

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• IMF Toxic Asset Write-Down Estimate Increases To U.S.4.1 Trillion
• Mark-To-Market Rule Change Raises Its Ugly Head Once Again!

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