No accounting for tastes
The Financial Accounting Standards Board has been robust in its defence of fair-value accounting, and is now set to ruffle regulatory feathers by proposing the approach be expanded to cover all financial instruments. Risk speaks to the standard-setter’s chairman, Bob Herz
Accountants didn’t give loans to shaky borrowers during the credit boom, nor did they securitise those assets and pick up six-figure bonuses as a result, but standard-setters such as the Financial Accounting Standards Board (FASB) still caught a lot of flak for the crisis.
For the most part, criticism revolves around the enthusiasm with which standard-setters embraced fair-value accounting in the years preceding the credit crunch. With markets in collateralised debt obligations (CDOs) of asset
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