The US Financial Accounting Standards Board
(FASB) has made a u-turn on controversial proposals to measure
financial assets, which values the loan books of entities according
to market price or ‘fair value’.
The FASB chairman Leslie Seidman said there
has been pressure from the investment community that favours
amortized cost accounting for assets that are held on a company’s
books.
The FASB’s decision is in line with the
proposal by the International Accounting Standards Board’s IFRS 9,
where more amortised cost is required.
The US Bankers association who criticised the
initial proposal, has welcomed the decision to ease the measures
that will enable many US banks to avoid marking to market their
loan books.
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By GlobalData
