This could be a game changer, though I am not sure if the Fed or FDIC can exempt banks holding cos from this rule if implemented, like the Fed did for GS when it became a bank holding co. (in name only). http://business.theatlantic.com/2009/07/mark-to-market_is_back_--_with_a_vengeance.php
I'm not sure this will be a big thing very fast. The link says lots of stuff will be sent to Comprehensive Income. Its the net figure that people really love. The stuff that will make to net is not likely to make a big impact Dont get me wrong, this hiding game wont last forever. Net income will probably come more under scrutiny once people dump the green shoot dope
Looks like nothing will happen until the Fall but are you sure that it will be a positive for net income. The way I read the following is that if an entity has an instrument like a derivative that loses value between reports (for example going from mark to model to this fair market value they mention) then that loss will flow through to the income statement as a loss. I am not an accountant and don't pretend to play one on ET so would be pleased to get clarification from someone who knows about these things. If my reading is correct the implications for the earning of financial' s could be huge and, to be uncharitable, would certainly explain why the bonuses were so large this year. July 24, 2009 FASB/IASB Joint Board Meeting Financial instruments with characteristics of equity. The Boards discussed an approach to displaying in the statement of comprehensive income the changes in the fair value of a liability instrument. That approachâthe cost of capital approachâwould separate the total changes in the fair value of liabilities into: 1. A line item in profit or loss that is similar to accrued interest but can be computed for many types of liability instruments, including derivative instruments with the issuerâs own equity instruments as their underlyings 2. The remainder of the change in fair value, which would be reported separately as a residual. The Boards decided tentatively not to pursue the cost of capital approach. Financial statement presentation. The Boards considered a summary of the responses to the Discussion Paper, Preliminary Views on Financial Statement Presentation. After reviewing those responses, the Boards affirmed the objective of the project to develop a single presentation model for IFRSs and US GAAP that can be applied consistently across all types of business entities. The Boards decided tentatively to: 1. Rewrite the objectives of financial statement presentation as core presentation principles 2. Explain how the core presentation principles relate to the conceptual framework for financial reporting 3. Retain cohesiveness as one of the core presentation principles and modify its application so that cohesiveness is not necessarily required at the line-item level 4. Retain disaggregation as one of the core presentation principles and provide guidance on when an entity may present disaggregated information in the notes to financial statements rather than on the face of those financial statements 5. Consider liquidity and financial flexibility in the context of the disaggregation principle, rather than as a separate core presentation principle. The Boards also noted that the FASB had decided tentatively in its recent work on financial instruments to require a single statement of comprehensive income. The IASB plans to consider that issue in September. Financial instrumentsâimprovements to recognition and measurement.The Boards updated each other on their respective proposed classification and measurement approaches for financial instruments. The IASB tentatively decided to hold three public roundtables during September in London, New York, and Tokyo to obtain feedback on its Exposure Draft, Financial Instruments: Classification and Measurement. The FASB will participate in these roundtables. The FASB expects to issue one Exposure Draft that addresses the measurement, classification, and impairment of financial instruments, as well as hedge accounting, by the end of this year or early 2010. The FASB will post to its website a detailed description of its tentative approach to classification and measurement of financial instruments as a way of informing interested constituents and obtaining early input from them. The FASB will continuously update that description as the Board makes additional decisions. The website will also contain a link to the IASBâs Exposure Draft. The FASB will consider input received on its tentative model as well as feedback received on the IASBâs Exposure Draft as it develops its Exposure Draft.