Tuesday, June 23, 2009

Figure This One Out

Once upon a time, the FASB assembled the Investors Technical Advisory Committee (ITAC) to provide investors' view on accounting rules written by the oracles in Norwalk. We're sure that seemed like a reasonable thing to do at the time.

What those wonks probably weren't counting on was the ITAC coming out and pretty much calling the FASB a bunch of lily-livered empty suits that will basically do whatever the likes of Barney Frank and Maxine Waters (oh, the fucking humanity) ask demand order them to do.

Citing a congressional hearing in March over mark-to-market accounting, the investor group said it had "grave concerns about what we believe to be a substantial erosion in the independence of the accounting standard setting process."

At the hearing, lawmakers told FASB Chairman Robert Herz to deliver new guidance on mark-to-market accounting within three weeks or face legislation changing the rule that had forced banks to write down billions of dollars in assets.

FASB bowed to pressure from Congress and the financial industry in early April by allowing banks more flexibility in valuing toxic assets.
In a twist of irony, members of the ITAC include Goldman Sachs and J.P. Morgan Securities. Whose, we'll give credit reluctantly here, bigwigs have come out in support of mark-to-market but are certainly (we may be going out on a limb here) paying money to the American Bankers Association.

The short: We knew the FASB was spineless but now we've got Goldman and J.P. Morgan types calling them out even though they likely pay lobbyists who were fighting against FAS 157.

Let's us know if you get this shitshow to make any sense.

Investor group says FASB's independence has eroded
[Reuters] Sphere: Related Content

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