Posted on 04/01/2009 10:10:38 PM PDT by IDRATHERNOT
The board that sets U.S. accounting standards is expected to ease rules that force banks to value assets at current prices, allowing them to reduce their losses on paper.
In a twist, though, the expanded leeway for financial institutions could undercut the government's new financial rescue program in which it is joining with private investors to buy up about $500 billion in toxic assets from banks, some experts say.
The fraud will continue and the markets will be up huge tomorrow....
(Excerpt) Read more at google.com ...
FASB - Failed Again and Still Behind
Dumb move, just means we’ll get to go through this crap again in a few years.
Ditto. Now they’ve been given explicit permisssion to make chit up as they go along. On the other hand, my lodge is worth $50M now, so I think I’ll apply for a loan in the AM.
Yes, but just think how many corrupt bankers, politicians, speculators and other assorted grifters will become rich splitting up the "stimulus" pie until then. "Fixing" the economy has never been the point.
ping
New fair value guidance runs counter to Treasury’s plan
More fair value disclosures beneficial to investors
FASB is likely to finalize new fair value guidance, FAS 157-e, at its meeting on April 2. If finalized, the guidance may run counter to the Treasury’s current plan to spend up to $1 trillion to remove impaired assets – toxic assets – from banks’ balance sheets.
FASB’s guidance allows banks to set their own values for certain troubled mortgages, corporate loans and consumer loans. As long as there are no bidders, banks can largely use their own judgment on setting asset values.
The banking community has been effective in lobbying FASB to amend or release the guidance, as Congress essentially bullied FASB into finalizing new rules at a hearing on mark-to-market rules in March. House representatives threatened to pass one of three potential bills by early April if FASB didn’t comply.
The Treasury Department’s financial stability plan proposes a solution for handling the nation’s “toxic assets” – which includes the mortgages and loans that many banks may now choose to keep on their books.
Fitch Ratings released a new report this week regarding FASB’s proposed guidance. The report suggests that transparency and added disclosures would benefit investors. Should FASB adopt the proposed guidance, disclosures by issuers should be expanded to allow for thorough and meaningful analysis, regardless of the minimum requirements.
Fitch's full report, “FASB Impairment and Fair Value Proposals – More Disclosures Would Benefit Investors,” demonstrates current and proposed accounting practices and describes the types of disclosures that would be helpful in analysis.
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