RSS feedFAS 157
’Level 2 assets are the new Level 3
Or, bye bye FAS 157. Hello Topic 820.
The accounting standard known as FAS 157 gained not-a-small amount of notoriety last year.
In March of 2009, the US Financial Accounting Standards Board (FASB) changed the rule,
From Level I to Level III, the myth of fair value
Fair value –or mark-to-market — accounting is back in the news.
The IASB and FASB, the European and US accounting standards boards, are reportedly grappling over global accounting convergence because of the issue. From the FT:
Marketing mark-to-market changes to the FASB
For an insight into the kind of lobbying that took place before the US Financial Accounting Standards Board agreed to ease mark-to-market rules, we direct you to this 2,180-word Wall Street Journal story (H/T Felix Salmon).
A Citi-fied Catch-22
We find this very amusing. But then, we have a very dark sense of humour.
Banks have been posting stellar first-quarter results in their fixed income divisions. These shouldn’t really be a surprise.
IASB under pressure on M2M
In case you missed it on Saturday.
PRAGUE, April 3 (Reuters) – European Union finance ministers called on a global accounting standards setter on Friday to change one of its rules in line with a reform of its U.S.
FHLB, the ‘B’ stands for Bowsher
Charles Bowsher is a name you probably don’t know.
Until March 24 he worked as chairman of the Federal Home Loan Banks’ (FHLBs) Office of Finance. Then he suddenly quit. Why?
Bloomberg’s Jonathan Weil reports (HT Zero Hedge):
The international FAS 157-e
The US accounting standards board – the FASB – voted to change mark-to-market rules yesterday, in a widely-expected move.
The analysts – and pundits – have had plenty of time to formulate their opinions on the subject; here’s a selection.
M2M mystery at Morgan Stanley
Morgan Stanley is sitting out of this particular US bank rally. Why?
There’s no real specific MS news. However, if the banks really are rallying based on changes to mark-to-market accounting in the States (despite the fact that these have been widely expected for weeks — whatever happened to buy the rumour sell the fact?) then perhaps this has something to do with it.
M2M (or FAS 157-e) change confirmed
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.
M2M Change = Time to buy banks?
The FASB’s amendment to mark-to-market accounting rules looks set to be approved today — giving US banks more flexibility to value their assets.
Time to buy banks then? Not quite.
While FAS 157-e,
Don’t you know that you’re toxic?
Reuters columnist John Kemp points us in the direction of this story.
WASHINGTON, March 16 (Reuters) – Financial companies could paint a rosier picture of some assets under a proposal by the U.S. Financial Accounting Standards Board that follows criticism of an accounting rule that has forced billions of dollars of writedowns during the financial crisis.
In defence of City felt-ery
A felt-collared source: a professional from the public relations industry (origin – N Miles, circa 1994)
The City PR industry got it in the neck on Monday night during a debate organised by the POLIS media think tank at the London School of Economics and chaired by that august institution’s director,
Schwarzman’s unfair values
So Stephen Schwarzman, the billionaire boss of private equity group Blackstone, thinks fair value accounting is partly to blame for the credit crunch.
The view is worth considering, although it isn’t uncontroversial.