Recent Developments in Mark-to-Market Accounting
Recent dislocations in the equity and credit markets have precipitated a review of the impact of mark-to-market accounting on the financial condition of U.S. financial institutions. On October 3, 2008, the Financial Accounting Standards Board issued a proposed Staff Position on FAS 157 to clarify the application of FAS 157 in the context of thin or disorderly markets and provide an illustrative example. On September 30, 2008, the Securities and Exchange Commission and the Financial Accounting Standards Board jointly issued a press release which also provided guidance on this issue. Additionally, on October 3, 2008, President George W. Bush signed into law the Emergency Economic Stabilization Act of 2008, which gives the Securities and Exchange Commission the authority to suspend mark-to-market accounting.