Thursday, 2 April 2009

"Significant Judgment" required in new M2M rule - so that's cleared that up!

Here is Bloomberg's report on the changes to M2M (mark to market).


April 2 (Bloomberg) -- The Financial Accounting Standards Board, pressured by U.S. lawmakers and financial companies, voted to relax fair-value rules that Citigroup Inc. and Wells Fargo & Co. say don’t work when markets are inactive.

The changes to so-called mark-to-market accounting allow companies to use “significant” judgment when gauging the price of some investments on their books, including mortgage-backed securities. Analysts say the measure may reduce banks’ writedowns and boost their first-quarter net income by 20 percent or more. FASB voted on the rules at a meeting today in Norwalk, Connecticut.


It's an odd choice of word- "significant" to accompany the kind of judgment that has to be shown.

I guess it was hard to find another adjectival term that would not have seemed immediately laughable in the light of the track record of those concerned.


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