ACCA: IASB should not abandon fair value

17 March 2010

ACCA’s policy paper argues that the 'mark-to-market' regime is not to blame for the banking crisis. ACCA maintains that the IASB should use the financial turmoil to establish a definitive conceptual framework for financial reporting, with fair value remaining a significant feature.

A call for fair value to remain a key element in global accounting standards has been put forward by ACCA in a new policy paper.
Entitled “Fair Value”, the paper considers the recent scrutiny and criticism directed at fair value accounting after banks and financial institutions placed some of the blame for the current economic crisis on the so-called 'mark-to-market' valuation methods.
However, ACCA maintains that the International Accounting Standards Board should use the financial turmoil to establish a definitive conceptual framework for financial reporting, with fair value remaining a significant feature.
'ACCA supports fair value and does not believe it was a contributor to the credit crisis,' said ACCA President Richard Aitken-Davies, 'The fact that fair value is the only realistic method of accounting for derivatives and getting them on the balance sheet is evidence enough of its worth.
'The crisis has shown the urgent need for clarification of what accounts can and cannot do so that realistic expectations of different stakeholders can be met. But the IASB should never again be put in the position of having to abandon due process under political pressure.'
What is ACCA's position?
ACCA policy paper on Fair Value

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