FAF urges SEC not to overturn FAS 157

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29 Oct 2008

Robert E Denham, Chairman of the US Financial Accounting Foundation, under which the FASB operates, has written to US SEC Chairman Christopher Cox urging the SEC to reject appeals it has received to overturn or suspend the FASB Statement 157 on fair value measurements and related FASB fair value guidance.

Mr Denham notes that the US Congress considered but rejected a similar call for suspension of FAS 157 when it adopted the Emergency Economic Stabilization Act. Here is Mr Denham's Letter to Chairman Cox (PDF 504k). An excerpt:

We acknowledge that the current financial crisis is testing the limits of investor confidence. We also acknowledge that extreme measures are being taken on many fronts to restore and stabilize investor confidence. However, we believe that action by the SEC to overturn a FASB standard, in the present context of enhanced investor concern about transparency of financial information relating to financial institutions and political pressure from some industry interest groups seeking to reduce transparency, will exacerbate investors' concerns about the reliability of financial information and further erode market conditions.

 

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