FASB reverses on loan commitments

But there may be a larger problem on the horizon for banks opposed to fair-value loan accounting. FASB, the US accounting standards-setter, also says it will add loans to its ongoing fair-value accounting project, through which it is devising mark-to-market accounting rules for all financial instruments.

FASB had ruled in December that unfunded loan commitments were essentially options on loans, and should therefore be subject to its fair-value accounting rule for derivatives, FAS 133. The de

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