SEC to Congress: Don't Suspend Mark-to-Market Accounting

WSJ ^ | 30 Dec 2008 | KATHY SHWIFF

[BGHater]

The Securities and Exchange Commission opposes suspension of fair-value, or mark-to-market, accounting rules in a report to Congress delivered Tuesday.

Instead, the agency recommends improvements to current practices, including reconsidering accounting methods for impairments and developing more guidance for determining fair value of investments in inactive markets, including where market prices are not readily available.

[mylife]

I would be inclined to trust the SEC had they shown some clue as to what was going on before things fell apart.

[xcamel]

They’re thrashing around in the dark killing business and jobs with every swing...

[AmericanGirlRising]

M2M is a disaster! A public company must hire twice the number of accountants to fulfill the requirements of SarbOx. Not to mention M2M is a ridiculous way to reassign value to anything owned.

There must be something behind why the SEC is pushing for this...and I’m not confident that it’s not nefarious.

[WestSylvanian]

Why would anybody listen to a thing the SEC recommends? Jim Cramer, Steve Forbes, and a slew of financial analysts that I’ve heard on the various market managers’ shows all agree this rule is creating havoc. European countries supposedly have abandoned it. More of the incompetents in the Bush administration putting their seal of failure on a policy that’s killing anybody and everybody who owns stocks. Fire these people or incarcerate them and do it quick.

[No Income Tax]

My question—who benefits from keeping the current mark-to-market accounting rules in place? I am a CPA and mark-to-market accounting is one of the worst things ever put into practice.

Some of the rules now in place were the result of what happened at Enron, Worldcom, etc. which had nothing to do with accounting standards. When management overrides controls, fraud happens.

[devane617]

The SEC has four flat tires. I don’t trust anything they say of suggest.

[the invisib1e hand]

it's a bit of an obfuscation to say, "keep m2m accounting" and at the same time say, "but make adjustments for illiquid markets," if only because the first implies "keep FASB 157." Obviously, listed securities can be marked to market reliably. So, who would argue against marking listed assets to market? It's the OTC stuff that's the issue. And paranoid accountants, laboring under SarbOx, are inclined to market illiquid assets way way down.

Don't know whether the present scheme can be salvaged to conform to reality or not...but one thing is for sure: FASB 157, SarbOx, the explosion in OTC trading, Statutory capital requirements, and moral hazard, all taken together, are a recipe for disaster.

[pointsal]

SEC ... where was this outfit on Madoff?

[mylife]

Smoking cigars and sipping congac at the “Insiders Club”

[pointsal]

The buggers missed the boat on Madoff. Then, .... then... they let the miserable excuse for a human being...go free to his apartment!!!!!

My view is TOSS THE WORTHLESS (by his own words) piece of flesh into a cold cell and monitor the video recorder!!!

How many widows and folks that depend on those investments are now penniless???

Just my hot-headed opinion.

[bpjam]

yeah, I’m taking advise from guys who said that oil prices showed no signs of ‘speculation’ or ‘non-commercial trading’. Ummmm, right....

[mylife]

I agree.

[pointsal]

...anyone else notice the odd “smirk” on Bernie’s face...

It just irritates the Hell out of me!

Toss that worthless piece of humanity into a cold cell...