The SEC loses touch with reality

Fair value assumes the exchange of assets or liabilities in orderly transactions. Under SFAS 157, it is appropriate for you to consider actual market prices, or observable inputs, even when the market is less liquid than historical market volumes, unless those prices are the result of a forced liquidation or distress sale.My contempt for this is boundless. The point about mark to market is that you estimate the price of a current transaction. If there are more buyers than sellers, then prices will be falling. Whether some of those sellers are forced is irrelevant. If you had to sell today, you would be joining them, so the price they are getting is the best pricing source for a current transaction. End of.
Labels: Accounting, Fair Value
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