FASB Staff Position Sparks War of Words

A couple of weeks ago, the Financial Accounting Standars Board (FASB) issued Staff Position 157-3. 157-3 interprets and clarifies Statement on Financial Accounting Standards number 157. 157, titled Fair Value Measurements, tells auditors how to value assets. 157-3 adds further guidance about valuing assets that aren't readily salable. 157-3 comes in the wake of a joint SEC-FASB clarification of 157 issued at the end of last month.

Immediately upon the release of 157-3, the American Bankers Association (ABA) wrote a letter to the SEC asking them to ignore 157-3. The ABA's complaint is that 157-3 uses unreliable bargain sale prices to value assets.

A few days later, the Center for Audit Quality wrote a letter to the SEC protesting strongly against calls, "to suspend fair value accounting."