Mark-To-Market Change - What Does it Mean?


This morning the Financial Accounting Standards Board announced that it is changing certain of the mark-to-market rules for assets that are held for sale, but are hard to value in today’s illiquid marketplace. The change will permit the banks to revalue these assets to a value that is based on what the assets would sell for in a normalized market, rather than using fire-sale prices. This is expected to enable those banks that wrote down values in the past, based on an approach that used fire-sale prices, to write up those assets, if the long-term cash flow modeling, credit and interest rate characteristics justify doing so.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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