[Swiftwater Gazette] Accounting

[Brad Haslett]

That didn't take long - just six months while we watched the markets
tank.  Now they decide to dump mark-to-market accounting. Thanks a
lot!

Brad

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Did DE-regulation Just Turn Around the U.S. Economy?

Posted By edgelings On April 2, 2009 @ 12:15 pm In Business, Opinion
DID DE-REGULATION JUST TURN AROUND THE U.S. ECONOMY?
by Michael S. Malone

Readers of my ABCNews column or Wall Street Journal opinion pieces
will remember that I’ve regularly listed four things that needed to be
done to improve the U.S. economy.  Now the first one has fallen:
mark-to-market accounting.

Today, under pressure from both lawmakers and financial institutions,
the five-member Financial Accounting Standards Board — the arbiter of
accounting rules in the U.S. – voted unanimously on new guidance for
mark-to-market.  Mark-to-market accounting, instituted in 2007, but
given real punch by FASB and the SEC in a “clarification” last
September, has been called the single most important reason the stock
markets crashed so abruptly last fall.  It all-but forced corporate
auditors to set the most conservative valuations on the holdings of
financial institutions — and in the process led to massive mark-downs
and the collapse of the capital markets.

The new mark-to-market changes let companies use “significant”
judgment in determining the prices of some investments on their books,
including mortgage-backed securities – a move that could help banks
reduce their  write downs and boost net income.  Better yet, FASB has
fast-tracked the matter, meaning that financial institutions will be
able to apply the changes to their first quarter results.

Nobody has fought louder or more brilliantly for the end of
mark-to-market than Steve Forbes, Forbes’ publisher Rich Karlgaard,
and CNBC’s Larry Kudlow.  They deserve everyone’s thanks — especially
all of those stockholders’ who are now watching the markets turn
upwards again.

That still leaves three to go:  1) Make Sarbanes-Oxley voluntary; 2)
Abandon options expensing as unrealistic; and 3) Leave the capital
gains tax alone.  We’ve now seen what an improvement of just one of
those can do.  Adoption of all four will bring us back to prosperity.