Comments on: From THE Chairman from the FASB regarding “valuation” http://www.marktomarketdebate.com/2009/03/13/from-the-chairman-from-the-fasb-regarding-%e2%80%9cvaluation%e2%80%9d/ Mon, 07 Feb 2011 22:30:36 +0000 hourly 1 http://wordpress.org/?v=3.3.1 By: al vega http://www.marktomarketdebate.com/2009/03/13/from-the-chairman-from-the-fasb-regarding-%e2%80%9cvaluation%e2%80%9d/comment-page-1/#comment-30 al vega Fri, 13 Mar 2009 19:48:14 +0000 http://www.marktomarketdebate.com/?p=768#comment-30 FASB 114 and 157 should be amended or suspended to provide for impaired loans that are considered to be held for investment (like securities), be carried at cost (current book value, excluding prior writedowns) for the next 3 years since 1/1/09. Any writedowns charged to the allowance for loan losses, or included as an "impairement" amount for spedific loans in the allowance for loans losses calculation since 1/1/08 should be allowed to be reversed. Provisions recorded in the allowance for loan losses of commitments related to impaired loans since 1/1/08 should also be allowed to be reversed to income. None of these adjustment reversals should be considered as the FASB 5 component of the allowance for loan losses computations. AFS investment securities with OTTI writedowns since 1/1/08 should be allowed to be reversed. Values should be restated to amortized cost as of 1/1/08. Footnote disclosure should be made for these reversal of writedowns. In 3 years since 1/1/09 the opinion calling for a requirement of OTTI writedowns should be evaluated Suspend the requirements of FASB 114/157 for appraisals, or cash flow computations, for all loans held for investment that are considered "impaired" for the same 3 year period since 1/1/09 noted above. FASB 114 and 157 should be amended or suspended to provide for impaired loans that are considered to be held for investment (like securities), be carried at cost (current book value, excluding prior writedowns) for the next 3 years since 1/1/09. Any writedowns charged to the allowance for loan losses, or included as an “impairement” amount for spedific loans in the allowance for loans losses calculation since 1/1/08 should be allowed to be reversed. Provisions recorded in the allowance for loan losses of commitments related to impaired loans since 1/1/08 should also be allowed to be reversed to income. None of these adjustment reversals should be considered as the FASB 5 component of the allowance for loan losses computations.

AFS investment securities with OTTI writedowns since 1/1/08 should be allowed to be reversed. Values should be restated to amortized cost as of 1/1/08. Footnote disclosure should be made for these reversal of writedowns. In 3 years since 1/1/09 the opinion calling for a requirement of OTTI writedowns should be evaluated

Suspend the requirements of FASB 114/157 for appraisals, or cash flow computations, for all loans held for investment that are considered “impaired” for the same 3 year period since 1/1/09 noted above.

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