Magazine article Strategic Finance

House Likely to Press Attack on FASB, SEC

Magazine article Strategic Finance

House Likely to Press Attack on FASB, SEC

Article excerpt

Look for the House to take another step toward influencing the independent accounting standards-setting process when its Financial Services Committee holds a second hearing on fair value accounting. At a first hearing on March 12 in the subcommittee on capital markets, insurance, and government sponsored enterprises, Chairman Rep. Paul Kanjorski (D.-Pa.) gave the Financial Accounting Standards Board (FASB) and the Securities & Exchange Commission (SEC) three weeks to make changes to their fair value rules and standards that would be acceptable to the financial services community.

The financial services industry is pushing hard for adjustment to Statement of Financial Accounting Standards (SFAS) No.157, "Fair Value Measurements." In the days following the March 12 hearing, the FASB put out two preliminary guidance documents that made some changes to SFAS No. 157 in the areas of market liquidity and impairment. But the American Bankers Association (ABA) was quick to criticize the potential "easings" as not going far enough. Ed Yingling, ABA president and CEO, noted that the ABA was pleased that the FASB had quickly published its proposed improvements for estimating market values in illiquid markets and changing the accounting for "Other Than Temporary Impairment" (OTTI). But he added, "While we are encouraged by today's action, we believe that the proposal does not adequately address problems with OTTI, which is critically important and has been extremely controversial for many years. …

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