During conference calls with auditors this week, Securities and Exchange Commission staff said that accountants should be on the lookout for improper selling strategies designed to take advantage of FAS 159, “Fair Value Option.”
The Financial Accounting Standards Board intended the rule to increase transparency for financial businesses, particularly by forcing banks to show the market value of the assets they hold. The standard allows companies to irrevocably choose to record the value of a financial instrument on its balance sheet, based on the price the instrument could bring in a market transaction.
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