The sentence is addressing “observable inputs,” which are COMPARABLE MARKET TRANSACTIONS that you are using to value your holding.

It is NOT addressing the holding that you are valuing. Big difference!

If one of the COMPS that you have selected is a liquidation transaction, YOU DON’T USE IT to value your holding.

It is NOT saying that if your holding is in foreclosure that you can simply ignore or fudge the valuation.

Read the actual words!

“A fair value measurement assumes that the asset or liability is exchanged in an orderly transaction between market participants to sell the asset or transfer the liability at the measurement date. An orderly transaction is a transaction that assumes exposure to the market for a period prior to the measurement date to allow for marketing activities that are usual and customary for transactions involving such assets or liabilities; it is not a forced transaction (for example, a forced liquidation or distress sale).”

The legal system was the first to be corrupted so the Supreme Court will rubber stamp whatever criminal enterprise the government wants to propose.

If I didn’t see it happening, I would never have believed it. Pretty much corrupts the whole system.

Actually, it doesn’t really matter what is good or not, when the forced sale comes through, it’s just a matter of whether a buyer emerges and what kind of price they are willing to pay.

RK
know what u mean, but frankly, as long as a buyer emerges, there will be a price; of course it’s instructive when no buyer emerges. Perhaps, the FED can resolve this, letthe FED put a buyer of last resort price to the unsaleable items, obviously that puts them in the unenviable position of possibly having to take up thoise assets on a permanent basis. (think wicked glint in the eye type of humour!)

Yes SFAS has always had the forced sales expemption. Until now, it has been ignored. Reason, the auditors fear their professional lives.

If the auditors used thr forced sales exemption on, say Bear or Thornburg, they would be handed the death penalty a-la Anderson in the Enron debacle. Look at the teeth hashing over New Century changed of accounting procedures.

Friday’s SEC letter is being looked at as a “get out opf jail free” card to the auditors. Should be invoke this rule on a firm that subsequently blows up, they will live to see another day.

We have laws which are broken by people. Corporations are in general, not accountable enties, but the people, like CEOs, CFOs are the people that should be fined and or placed in jail for fraud. For some reason, we have a network of public servants who refuse to comply with the law, then they look away at a network of crooks that walk away with massive bonuses for stealing. These are people breaking laws, hiding behind corporations that are backed by the governments un-willingness to act against crimes!

An example of a bogus organization, like FASB is the following:

The Public Company Accounting Oversight Board (or PCAOB) (sometimes called “Peekaboo”) is a private-sector, non-profit corporation created by the Sarbanes-Oxley Act, a 2002 United States federal law, to oversee the auditors of public companies. Its stated purpose is to ‘protect the interests of investors and further the public interest in the preparation of informative, fair, and independent audit reports’. Although a private entity, the PCAOB has many government-like regulatory functions, making it in some ways similar to the private Self Regulatory Organizations (SROs) that regulate stock markets and other aspects of the financial markets in the United States.

100% bogus! They audit public accounting firms on wall street that fail audits year after year, and it doesnt matter, because there is zero accountability in this mafia-like collusion ring!

In addition to encouraging EVEN LESS transparency at investment and commercial banks, I’m certain that FAS 157 will continue to permit financial institutions to realize gains on liabilities whose values have gone down as a result of increased credit risk and subsequent widening of credit spreads. This looks to me as if regulators are actually encouraging financial institutions to avoid discovering appropriate market clearing prices for illiquid assets AND they’re going so far as to ‘reward’ these same institutions for their significant credit risk by flowing gains through to earnings. Is the SEC the next disaster waiting to happen and are bank balance sheets so bad that even the SEC is kneeling to markets? I guess earnings driven by deterioration in your own credit quality works, but I’d say that’s quite an interesting interpretation of the concept of ‘fair value’.

(btw, i dont believe i’ve posted a comment before, but Yves I’m the guy who recently emailed you with a link to information on bank holding companies)