FASB gives firms more leeway in valuing assetsForgive my ignorance, but I was under the impression that loosey-goosey accounting, and "flexibility" in valuing assets was one of the things that CAUSED the current mess. How exactly will legitimizing "pencil whipping" the books help???
By MARCY GORDON, AP Business Writer
2 Apr 2009
WASHINGTON – The board that sets U.S. accounting standards on Thursday gave companies more leeway when valuing assets and reporting losses, providing a potential boost to battered banks' balance sheets.
Enron's fall from grace was at least partly precipitated by very creative "mark-to-market" accounting & valuations.
Can someone explain the rationale behind FASB's decision?