facebook
twitter
rss
account
search
search
 

SEC accounting rule change draws fire

Oct. 1, 2008 at 2:00 PM   |   Comments

NEW YORK, Oct. 1 (UPI) -- The Securities and Exchange Commission's new, relaxed accounting rules could give U.S. businesses too much leeway in assessing their assets, critics said.

The rules announced Tuesday say firms do not have to use the lowest prices when assessing the value of their own securities. The accounting rules previously tied this process to the lowest prices, even if a struggling firm had to sell similar securities at less than full market values, USA Today reported Wednesday.

The new rule "is intended to provide increased clarity related to the practices that may be used to determine an appropriate fair value in the light of current market conditions," SEC deputy chief accountant Jim Kroeker said.

"These illiquid assets are a serious problem. No one knows what they are worth," Brian Wesbury at First Trust Advisors told the newspaper. "But they're worth more than the fire-sale prices."

But, the new accounting rule "is a very deceptive statement," said Donn Vickrey, co-founder of Gradient Analytics.

"It turns (the current practice) on its head and lets you do whatever you want to do again," Vickrey said.

© 2008 United Press International, Inc. All Rights Reserved. Any reproduction, republication, redistribution and/or modification of any UPI content is expressly prohibited without UPI's prior written consent.
Most Popular
1
Destroyers with ballistic missile defense capability heading to Japan Destroyers with ballistic missile defense capability heading to Japan
2
Warren Buffett loses $2 billion in 2 days on investments Warren Buffett loses $2 billion in 2 days on investments
3
Little girls drop F-bombs for feminism in new FCKH8 video Little girls drop F-bombs for feminism in new FCKH8 video
4
Texas plant converts CO2 to baking soda Texas plant converts CO2 to baking soda
5
Brazil, Argentina to strenghten aerospace cooperation; talk Gripen deal Brazil, Argentina to strenghten aerospace cooperation; talk Gripen deal
Trending News
Around the Web
x
Feedback