Recommendation 43. Study How FVA Can Be Improved. The Committee believes 'fair value' accounting is a problematic standard in inactive or distressed markets because it conflates the concepts of market value and credit model value and may confuse investors. We do not believe the problem has been solved by FASB's latest guidance. We recommend continuing to study how 'fair value' accounting can be improved. We further recommend that this be done on a joint basis by FASB and IASB, so the two major accounting standard setters are consistent in their approach.

Recommendation 44. Supplement FVA with Dual Presentation of Market and Credit Values. To supplement fair value reporting, the Committee proposes that FASB require an additional dual presentation of the balance sheet for Level 2 and Level 3 assets using credit value and market value independently of each other. Accompanying this dual presentation, firms should also disclose their underlying valuation methodologies. In the case of credit value, this includes sharing modeling techniques, estimates, assumptions, and risk factors. In the case of market value, the disclosures should reveal what market prices were actually relied on.

Recommendation 45. Allow The Fed to Use a Non-GAAP Methodology. As for regulatory accounting, the Committee believes the Fed should not be limited to following US GAAP and should instead be free to choose another method (credit value, market value, or some combination of both) it deems appropriate.

Recommendation 46. Implement FIN46R. As for consolidation, we agree with the FIN 46R approach because it focuses on the issue of control. [FIN 46R is FASB's revised standard on consolidation of special purpose vehicles.]