IIF Dallara calls for thorough dialogue on valuation issues

29 May 2008

There is a need for clarification on a number of fronts, IIF Managing Director Dallara states. This includes considering other refinements in valuation methodologies and greater flexibility regarding the transfer of assets between accounting categories.

There is a need for clarification on a number of fronts, such as pricing inputs in illiquid markets, Charles Dallara, Managing Director of the IIF states. Furthermore, for some products in particular circumstances, there is merit in considering other refinements in valuation methodologies and greater flexibility regarding the transfer of assets between accounting categories - that is trading versus held to maturity.

 

In his statement following IIF’s informal consultations regarding the application of fair value accounting in illiquid conditions, Dallara states that views differ widely. However, there is a view that applying new techniques, or greater flexibility, in current circumstances would be fraught with difficulties, he notes.

 

What is crucial, he said, is a thorough dialogue in order to address both the many issues that require clarification and the unintended consequences that have arisen, as well as to consider the medium-term improvements to fair value accounting.

 

Press release


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