The American Society of Appraisers (ASA), the Royal Institution of Chartered Surveyors (RICS) and the American Society of Farm Managers and Rural Appraisers (ASFMRA) have written to the Securities and Exchange Commission (SEC) and other federal agencies to raise their joint concerns over changes to the FAS 157 rule. While supportive of the SEC and FASB's effort to provide clarification on the issue of valuing financial assets, ASA, RICS and ASFMRA believe that a suspension of FAS 157, temporary or otherwise, for illiquid assets, is not beneficial.
The group asserts that—given the current crisis in the financial markets, subprime mortgage issues and general worldwide economic instability—fair valuation standards are necessary to generate future global investor confidence. Their contention: Such standards create a financial reporting system based on transparency, proper disclosure and mark to market information which, in turn, provides true valuation data to investor, regulator, policymaker and taxpayer.
“The current economic crisis is driving emergency actions including the easing of fair value requirements for reporting securities. However, it is important that regulators and the market do not lose sight of the basis for fair value reporting of financial instruments and all other assets,” explains Ronald Seaman, a Fellow of the American Society of Appraisers and the organization's International President.
For expert opinions on all the latest relating to FAS 157, sign up for FASB Update: Potential Liabilities and Volatility, a very special BVR teleconference on November 20th with Mike Mard of The Financial Valuation Group and Tony Yanez of Willkie Farr & Gallagher, LLP. You can view the complete agenda and register here.
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