FASB could be swayed to modify its fair-value plan

An updated report from Reuters

Strong opposition to a controversial proposal to expand fair value accounting could sway rulemakers to modify the plan, a member of the U.S. accounting rule-making board said on Tuesday.

Lawrence Smith, a member of the Financial Accounting Standards Board, said rule makers could be persuaded to modify their plan to expand fair-value accounting rules, an effort that has faced strong opposition. Smith said comment letters are overwhelmingly against the proposal, which would require financial assets to be valued based on mark-to-market standards.

The proposal by the Financial Accounting Standards Board calls for loans and other financial assets to be valued based on what they would fetch in the market, known as mark-to-market, or fair value. That change is intended to give investors a clearer picture of assets held on banks' books.

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