Fair Value Accounting: Finding the Middle Ground in the Mark-to-Market Dispute
IMGCAP(1)][IMGCAP(2)]Critics of fair value accounting have indicted it as being the cause, or at least having exacerbated, the global financial crisis of 2007-2008.
Many of those detractors are lobbying for the suspension of fair value accounting and some are even calling for a return to pure historical cost accounting, especially for large, publicly traded financial institutions such as banks. While there is likely some truth in the accusation that fair value accounting has played a role in influencing market and consumer behavior, it is inappropriate to demand or expect the accounting profession to be responsible for establishing accounting policies that seek to do so.
