Disclaimer: I have not read the earlier posts in this thread, so I may be repeating a link provided already.
http://uk.reuters.com/article/usPoliticsNews/idUKTRE52379220090304
Congress to examine mark-to-market accounting: source
4 March
By Rachelle Younglai
WASHINGTON (Reuters) - A U.S. House financial services subcommittee plans a hearing on mark-to-market accounting rules, which have been blamed for forcing banks to report billions of dollars in write-downs, a source briefed on the matter told Reuters on Wednesday.
The subcommittee on capital markets has tentatively scheduled the hearing for March 12, the source said.
The U.S. Securities and Exchange Commission's chief accountant and the chairman of the Financial Accounting Standards Board, will be asked to testify, the source said.
U.S. industry groups have urged the SEC and FASB to significantly alter or suspend the accounting rule, saying it is undermining the government's multibillion-dollar effort to stabilize the financial sector.
Mark-to-market accounting requires assets to be valued at current market prices. Some banks say it forces them to mark down assets to artificially low prices in the current financial crisis, even when banks intend to hold the assets past the current reporting period.
Shares of banks, such as Bank of America and Wells Fargo, rose after Reuters reported the plans for the mark-to-market hearing, underscoring the sensitivity of the issue for financial companies.
Last year, the SEC and FASB clarified how to value assets in illiquid markets. The SEC gave the financial industry a reprieve from marking hard-to-value assets down to fire sale prices.
The SEC and FASB have said they are working on more guidance to help banks determine the value of an asset when there is little or no market trading.
The House Financial Services Committee's oversight plan includes reviewing mark-to-market rules and considering whether there is a need for new and additional changes to the standard.
The committee also plans to consider whether alternatives exist to pricing distressed assets in inactive markets, such as separating liquidity and credit risk.
http://uk.reuters.com/article/usPoliticsNews/idUKTRE52379220090304
Congress to examine mark-to-market accounting: source
4 March
By Rachelle Younglai
WASHINGTON (Reuters) - A U.S. House financial services subcommittee plans a hearing on mark-to-market accounting rules, which have been blamed for forcing banks to report billions of dollars in write-downs, a source briefed on the matter told Reuters on Wednesday.
The subcommittee on capital markets has tentatively scheduled the hearing for March 12, the source said.
The U.S. Securities and Exchange Commission's chief accountant and the chairman of the Financial Accounting Standards Board, will be asked to testify, the source said.
U.S. industry groups have urged the SEC and FASB to significantly alter or suspend the accounting rule, saying it is undermining the government's multibillion-dollar effort to stabilize the financial sector.
Mark-to-market accounting requires assets to be valued at current market prices. Some banks say it forces them to mark down assets to artificially low prices in the current financial crisis, even when banks intend to hold the assets past the current reporting period.
Shares of banks, such as Bank of America and Wells Fargo, rose after Reuters reported the plans for the mark-to-market hearing, underscoring the sensitivity of the issue for financial companies.
Last year, the SEC and FASB clarified how to value assets in illiquid markets. The SEC gave the financial industry a reprieve from marking hard-to-value assets down to fire sale prices.
The SEC and FASB have said they are working on more guidance to help banks determine the value of an asset when there is little or no market trading.
The House Financial Services Committee's oversight plan includes reviewing mark-to-market rules and considering whether there is a need for new and additional changes to the standard.
The committee also plans to consider whether alternatives exist to pricing distressed assets in inactive markets, such as separating liquidity and credit risk.