The Financial Accounting Standards Board (FASB) has indicated it is beginning a review of mark to market accounting rules in cooperation with the International Accounting Standards Board (IASB). The board is said to be considering extending current mark to market principles to a much broader range of securities than they currently cover by taking a more holistic view of accounting for loans, bonds, derivatives and stocks.
The project, which is to be conducted over the next few months, is the first step in the standards setting process. However, the extension of the unpopular mark to market rules, which have come under heavy criticism from banks and regulators alike, may prove difficult in the current environment. The rules have been blamed for allowing pessimistic assessments of securities to sway the market.