The Horror, The Horror…

In case you haven’t heard, mark-to-market accounting is NOT completely dead.  After the House Financial Services Committee leaned on the FASB to fix mark-to-market account in March of 2009 because it was unnecessarily destroying the capital of, in many cases, otherwise healthy financial institutions, the FASB acted quickly and changed the accounting guidance so that market values were still disclosed to investors but would not destroy their capital if they intended to hold investments longer than the duration of the fire sale.  Now the FASB is making a push to go BACK to mark-to-market accounting!  And this time it includes more than just investments.  Read the article below for more details.  The worst part of all of this is that not only will this impact a financial institution’s ability to implement their long-term business model of lending and investing, it will affect individuals’ and businesses’ ability to get loans!

Stop This Horror Before It Starts Again – Forbes Magazine, June 28, 2010