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SEC Commences Congressionally Mandated Study of Mark-to-Market Accounting

Yesterday, the SEC announced the commencement of a study of the mark-to-market accounting standards provided for in FASB Statement 157. Section 133 of the Economic Stabilization Act of 2008 instructs and authorizes the SEC, in consultation with the Federal Reserve and the Treasury, to conduct a study of mark-to-market accounting focusing on:

  1. the effects of such accounting standards on a financial institution's balance sheet;
  2. the impacts of such accounting on bank failures in 2008;
  3. the impact of such standards on the quality of financial information available to investors;
  4. the process used by the Financial Accounting Standards Board in developing accounting standards;
  5. the advisability and feasibility of modifications to such standards; and
  6. alternative accounting standards to those provided in FAS 157.

SEC Chairman Christopher Cox announced that James Kroeker, Deputy Chief Accountant at the SEC, will spearhead the study for the Commission. The Commission also announced that it will schedule public roundtables to gather input and perspectives from investors, accountants, standard setters, business leaders, and other interested parties. The study is to be completed by January 2, 2009.

The full text of the press release is available here: http://www.sec.gov/news/press/2008/2008-242.htm