AP:

The board that sets U.S. accounting standards on Thursday gave companies more leeway when valuing assets and reporting losses, providing a potential boost to battered banks’ balance sheets.
The independent Financial Accounting Standards Board voted to adopt new guidelines under the so-called mark-to-market accounting rules, which require companies to value assets at prices reflecting current market conditions. The board was meeting at its headquarters in Norwalk, Conn.

The changes, which apply to the second quarter that began this month, will allow the assets to be valued at what they would go for in an "orderly" sale, as opposed to a forced or distressed sale.
The new guidelines also will allow banks to avoid reporting some losses on securities by splitting them among factors like fluctuating interest rates that won’t have to be counted toward net income or loss.

Two of the five FASB board members, Thomas Linsmeier and Marc Siegel, voted against the change in reporting of such impaired assets. They argued it was the sort of decision bank regulators should make, because it could affect banks’ capital positions, and that the FASB had been pressured by Congress to take it.

My comment: This is a pure political move to allow the banks to hide these toxic assets. We now have politicians pressuring these independent groups to change rules and do anything else that is required to try and keep the game going at least till the 2010 Congressional election. After seeing how this president and congress are politicizing the economy are you telling me that the FED is going to be able to pull in all this liquidity that they have been pumping once inflation begins coming back maybe as early as this summer. I am sorry but I just do not see it happening.

John Polomny
The Real Deal