Among the most terrifying movies I've ever seen was Last House on the Left, a 1972 movie that was loosely based on a series of murderous events in the late 1950s. Now Hollywood has seen fit to remake that film in a version even more horrifying than the original release, including a scene so graphically violent that some film critics have posted a warning to potential viewers.

As of now, I have no plans to see the updated House, because I have envisaged another "House" scenario that is far more frightening. The House I'm referring to is Congress and its not-so-subtle threat of dictating accounting standards.

As I've railed before in this space, the government's attempts to take over and run anything in a way that could even be loosely termed "competent" could be spliced into a horror reel all its own.

I refer to last month's hearings before the House Financial Services Committee's Subcommittee on Capital Markets, Insurance, and Government-Sponsored Enterprises.

The topic du jour was fair value accounting, which has become one of the flashpoints of debate during this current financial malaise, with a number of organizations - particularly the bankers who have found a sympathetic ear on Capitol Hill - calling for the loosening or outright abolition of the standards.

Lawmakers pressed Financial Accounting Standards Board Chairman Robert Herz to make changes in mark-to-market accounting in under a month. (The thought of Congress issuing deadlines that strict is in itself somewhat hilarious.) In an attempt to stall Congress from drawing up legislation to dictate accounting standards, Herz agreed to consult with the other members of FASB and work to issue guidance.

"You are the FASB, you cannot be the SlowsB," quipped House Financial Services Committee Chairman Barney Frank, D-Mass. This from a man who pooh-poohed the notion that Fannie Mae and Freddie Mac were in danger of imploding.

To be sure, the profession deserves to shoulder some of the blame in this, because often it cannot get out of its own way, and FASB has never garnered a reputation for moving at an accelerated pace. And to be fair, minds far brighter than mine have opined that fair value could stand some tweaking, such as in its application to various types of assets under various market conditions, and in providing clearer disclosures about the assumptions and methods applied, as well as distressed loan guidance.

Herz maintained that a number of financial institutions already have the ability to use a cash flow model instead of mark-to-market when accounting for their illiquid assets, but agreed that smaller concerns would face some obstacles in drawing up such models. At press time, FASB was scheduled to vote in early April on rule changes.

Whatever will emerge from FASB will surely be better than lawmakers dictating standards.

For that, I'm sure we can get a sneak preview when Last House on the Left - The Sequel is released.

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