No I wouldn't. The purpose of it is to show the true value of holdings. The people who want to suspend it want to have it both ways. They like mark to market when it helps them and don't like it when it hurts them. Well tough shit I say. When mark to market produced higher values than book value, you never heard anyone complaining about it, right?
The reason accounting rules are there in the first place is to avoid the fudging of the books to have them represent whatever the hell you want them to represent.
Changing the rules as you go along because you're losing is what crybabies do. Grown men swallow the pill and deal with the consequences.
The reason accounting rules are there in the first place is to avoid the fudging of the books to have them represent whatever the hell you want them to represent.
Changing the rules as you go along because you're losing is what crybabies do. Grown men swallow the pill and deal with the consequences.
http://www.reuters.com/article/idUSN3046565120081001
UPDATE 3-SEC gives banks more leeway on mark-to-market
WASHINGTON, Sept 30 (Reuters) - U.S. securities regulators on Tuesday gave the financial industry a reprieve from marking hard-to-value assets down to fire sale prices, throwing a lifeline to an industry beset by strained credit markets and the latest round of bank failures.
The U.S. stock market added to gains on the news, in hopes that regulators' new interpretation of fair value, or mark-to-market, accounting rules, will slow or reverse the heavy flow of mortgage-related losses on banks' balance sheets.
In the new guidance, first reported by Reuters, the U.S. Securities and Exchange Commission reminded financial services firms that they don't need to use fire sale prices when evaluating their hard to price assets.
"This is a significant first step and adds stability, confidence, and liquidity within the capital markets," said Steve Bartlett, president and chief executive of The Financial Services Roundtable. "By clarifying how to treat assets in an uncertain market, the SEC is continuing to provide transparency to investors and helping institutions to provide credit in periods of market stress."
U.S. accounting rule maker, the Financial Accounting Standards Board said on its Web site on Tuesday that it would change the agenda for its Wednesday meeting to focus on fair value accounting. The board is contemplating issuing additional guidance through a FASB staff position as soon as Wednesday, according to a person familiar with the matter.
MARK-TO-ESTIMATE
UPDATE 3-SEC gives banks more leeway on mark-to-market
WASHINGTON, Sept 30 (Reuters) - U.S. securities regulators on Tuesday gave the financial industry a reprieve from marking hard-to-value assets down to fire sale prices, throwing a lifeline to an industry beset by strained credit markets and the latest round of bank failures.
The U.S. stock market added to gains on the news, in hopes that regulators' new interpretation of fair value, or mark-to-market, accounting rules, will slow or reverse the heavy flow of mortgage-related losses on banks' balance sheets.
In the new guidance, first reported by Reuters, the U.S. Securities and Exchange Commission reminded financial services firms that they don't need to use fire sale prices when evaluating their hard to price assets.
"This is a significant first step and adds stability, confidence, and liquidity within the capital markets," said Steve Bartlett, president and chief executive of The Financial Services Roundtable. "By clarifying how to treat assets in an uncertain market, the SEC is continuing to provide transparency to investors and helping institutions to provide credit in periods of market stress."
U.S. accounting rule maker, the Financial Accounting Standards Board said on its Web site on Tuesday that it would change the agenda for its Wednesday meeting to focus on fair value accounting. The board is contemplating issuing additional guidance through a FASB staff position as soon as Wednesday, according to a person familiar with the matter.
MARK-TO-ESTIMATE
That's not a bad solution. Sure beats sticking it to the taxpayer IMO.
I agree it's hard to determine the market price in an illiquid market. The fire sale price is zero, but the treasury was going to offer a fire BUY price which errs just as much in the opposite direction.
The best estimate would be the average of the fire sale (bid) and fire buy (ask) price, ie. half of what the treasury would pay under the bill. Trouble is, you have to go through the reverse auction process to find out what that is.
They should bring actuaries into it and do Monte Carlo simulations on various assumptions. Shouldn't be too tough to put together something reasonable.
I agree it's hard to determine the market price in an illiquid market. The fire sale price is zero, but the treasury was going to offer a fire BUY price which errs just as much in the opposite direction.
The best estimate would be the average of the fire sale (bid) and fire buy (ask) price, ie. half of what the treasury would pay under the bill. Trouble is, you have to go through the reverse auction process to find out what that is.
They should bring actuaries into it and do Monte Carlo simulations on various assumptions. Shouldn't be too tough to put together something reasonable.
Yes, why should banks write off performing assets? Of course, they should write-off NPAs.
Furthermore, if people have equity in their homes and have been paying they debts on a historic basis, should a bank be forced to write-off that asset because they fell 30 days behind? No
Once again, common sense needs to prevail.
Furthermore, if people have equity in their homes and have been paying they debts on a historic basis, should a bank be forced to write-off that asset because they fell 30 days behind? No
Once again, common sense needs to prevail.
