The Financial Accounting Standards Board may change some accounting rules to make it more difficult for banks to get subprime loans off their books.At an accounting conference held last month in New York, FASB Chairman Robert Herz said that the rules might require banks to keep loans on their books that they previously have been able to package and sell off or securitize.
In April, FASB voted to eliminate special securitization vehicles. Herz said that banks would have to use other rules for off-balance-sheet vehicles, and that these rules might get tougher. In addition, banks could face more rigid tests for which assets could remain off their books.
Meanwhile, at that conference, Conrad Hewitt, the chief accountant of the Securities and Exchange Commission, said that the United States must adopt International Financial Reporting Standards by 2011 in order to successfully compete in global capital markets.
By that time, Hewitt predicted that most other countries will have already made the transition to IFRS, and therefore, U.S. companies would have trouble raising capital abroad if they continue using U.S. generally accepted accounting principles.
Register or login for access to this item and much more
All Accounting Today content is archived after seven days.
Community members receive:
- All recent and archived articles
- Conference offers and updates
- A full menu of enewsletter options
- Web seminars, white papers, ebooks
Already have an account? Log In
Don't have an account? Register for Free Unlimited Access