FASB Moves on Mark-to-Market

Market-value accounting may have moved a step closer Wednesday to becoming a required practice.

Responding to testimony from the Securities and Exchange Commission and other groups, the Financial Accounting Standards Board speeded up its timetable for deciding whether banks should mark some balance-sheet items to market value.

"It looks like they have enough votes to do what the SEC wants," said a source who attended.

The SEC has called on accountants to require that banks prepare financial statements using market values of both assets and liabilities.

Victory for the SEC would be a blow to the American Bankers Association, which has lobbied hard against such a change. The ABA has argued that marking a portion of banks' balance sheets to market would be misleading, while determining market values for illiquid loans would be impossible.

"It seems like they listened to part of what we said but they did not listen to the other part," said Donna Fisher, ABA accounting policy representative. The board will discuss market-value accounting again in July, she said.

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