We Didn't Start The Fire (Sale)
By Edith Orenstein, FEI Financial Reporting Blog - With the WSJ reporting “Agreement Reached on Bailout Ahead of High-Level Meeting,” what about related accounting issues - specifically, application of fair value or mark-to-market accounting in illiquid markets? Presumably, accounting matters won’t be part of the legislation, but some are wondering if relief from fair value accounting will be addressed through separate action by the SEC.
Earlier today, SEC staff reportedly met with representatives of the American Bankers Association (ABA), the Center for Audit Quality (CAQ - affiliated with the AICPA), and senior FASB and PCAOB staff, as reported in today's BNA Daily Report for Executives (“Bankers Seek Immediate SEC Guidance On Proxies for Fair Value in Illiquid Markets,” by Steve Burkholder and Susan Webster.)
What could the outcome of such talks be? Is it realistic to think some action may be taken to modify current accounting rules in light of the credit crisis? Read my observations on this question here.