Schapiro: Mark-To-Market Accounting Must Be Improved, Not Suspended
In testimony Wednesday before the House Appropriations Financial Services Subcommittee, Schapiro upheld views expressed by the SEC in a report released late last year that mark-to-market accounting is important because it provides transparency to investors.
Mark-to-market accounting requires companies to record their assets at their current market value. Some have blamed it for exacerbating the crisis because many financial institutions have been forced to write down billions of dollars from their mortgage-related holdings.
"Investors have told us that fair value is important to them. It gives them transparency and the real insight into the financial statements," Schapiro said.
"That said, there is undoubtedly a lot of difficulty in determining the value of illiquid assets in the kind of market we are experiencing right now."
"It is not our intention that these assets be written down to zero," she added.
Schapiro reaffirmed that the SEC has directed the Financial Accounting Standards Board, or FASB, to issue more guidance on how to apply the accounting standards particularly on highly illiquid assets.
Other representatives from the SEC plus the FASB will testify on the issue Thursday.
-By Sarah N. Lynch, Dow Jones Newswires; 202-862-6634; sarah.lynch@dowjones.com
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Publié le 11 mars 2009 Copyright © 2009 Dowjones
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