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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