Banks voice opposition to fair value
Industry unhappy with expansion of accounting rules in US
A peak banking group has voiced its opposition to the expansion of fair value
accounting in the US.
The American Banking Association (ABA) said it is ‘deeply concerned’ about
the US standard setter’s plans to expand fair-value accounting to loans and
other securities, news agency Reuters reports.
The move would force banks and other US financial institutions to value loans
on their balance sheet at their present market value.
At present they only need to value traded securities, such as stock holdings
or real estate at fair value.
In a statement, Donna Fisher, the ABA’s senior vice president of tax,
accounting and financial management, said she supported the fair value method
for ‘actively traded’ assets, but was concerned about their application for
traditional loans.
‘What the accounting boards are discussing now would be the biggest
accounting change we’ve ever seen,’ she said.
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