From Reuters.
FASB AGREES OBJECTIVE OF MARK-TO-MARKET ACCOUNTING IS STILL WHAT WOULD BE RECEIVED IN AN ORDERLY TRANSACTION IN THE CURRENT INACTIVE MARKET.
FASB SAYS AN ‘ORDERLY’ TRANSACTION DOES NOT INCLUDE FORCED LIQUIDATION OR DISTRESSED SALE.
FASB AGREES TO REMOVE PRESUMPTION IN MARK-TO-MARKET ACCOUNTING RULE THAT ALL TRANSACTIONS IN AN INACTIVE MARKET ARE DISTRESSED UNLESS PROVEN OTHERWISE.
FASB SAYS NEW MARK-TO-MARKET ACCOUNTING GUIDANCE SHOULD BE PROSPECTIVE NOT RETROACTIVE.
FASB SAYS NEW GUIDANCE WILL BE EFFECTIVE FOR 2009 SECOND QUARTER, WITH EARLY APPLICATION PERMITTED FOR THE FIRST QUARTER.
Bloomberg.
The Financial Accounting Standards Board, pressured by U.S. lawmakers and financial companies, voted to relax fair-value rules that Citigroup Inc. and Wells Fargo & Co. say don’t work when markets are inactive. The changes approved today to fair-value, also known as mark-to-market, allow companies to use “significant” judgment in valuing assets to reduce writedowns on certain investments, including mortgage-backed securities. Accounting analysts say the measure, which can be applied to first-quarter results, may boost banks’ net income by 20 percent or more.
Related links:
Financial Accounting Standards Board
M2M Change = Time to buy banks? – FT Alphaville
Remarked to market, a bonus for US banks this week? - FT Alphaville