[Mark-to-market is the biggest accounting controversy since the expensing of employee stock options was mandated several years ago. Please see #msg-36196670 for background info and Buffett’s take.]
NEW YORK (Reuters) - The Financial Accounting Standards Board, which sets U.S. accounting rules, will discuss mark-to-market accounting guidance at its board meeting on Monday, according to its website.
The board says it will discuss "additional application guidance" that would clarify how mark to market is used in illiquid markets, according to the website.
U.S. lawmakers told FASB Chairman Robert Herz on Thursday to deliver new guidance on mark-to-market accounting within three weeks, or face legislation changing the rule that has forced banks to write down billions of dollars in assets.
The rules, also known as fair value accounting, were aimed at giving investors an accurate view of financial companies' books, but some banks and investors have blamed the rules for accelerating the financial crisis.
The board also said it will discuss "how best to present" other-than-temporary impairments, which affect how companies write down assets that have suddenly declined in value.[This action pertains to balance-sheet investments and goodwill. Although goodwill is an accounting artifact, it directly affects the regulatory capital requirements of banks and insurance companies.]
The American Bankers Association has urged FASB and U.S. regulators to look at clarifying impairment rules.
The U.S. Securities and Exchange Commission and FASB oppose suspension or elimination of the rule, saying that such a move would hurt the quality and transparency of financial reporting and further diminish investor confidence in the capital markets.
Last year, the SEC and FASB released guidance saying the financial industry did not need to mark down values of hard-to-value assets to fire-sale prices, saying the "fair value" of these assets should reflect orderly transactions.
However, in the past few months, FASB has been criticized for the "pro-cyclical" effects of mark-to-market accounting, which some claim led to a downward spiral where bank assets valued at market prices had to be written down, causing markets to freeze up and leading to more write-downs.
FASB had said last month that it had started two projects to further improve fair value accounting in illiquid markets and that it hoped to complete the work by the end of the second quarter. FASB also said it has plans to work with the London-based International Accounting Standards Board on a broad review of impairment rules.‹
Market Data 
Markets 
AI
