WASHINGTON — Corporate credit unions are crossing their fingers that testimony at two Securities and Exchange Commission roundtables today will influence the SEC to consider updating fair-value accounting rules.
The roundtables are part of a congressionally mandated study required by the Emergency Economic Stabilization Act, which said the SEC may put a moratorium on mark-to-market accounting if the regulator deems such a move "necessary or appropriate in the public interest."
Yesterday, the Association of Corporate Credit Unions issued a letter to SEC Acting Secretary Florence Harmon.
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"While corporates are not an SEC registrant, they are impacted by SEC actions," wrote Brad Miller, ACCU executive director, in the letter.
The letter also stated: "We are concerned with the use of fair values based on exit values in an inactive market when impairment exists that is deemed to be other-than-temporary. Fair value…is not intended to represent forced sales. However, FASB's requirement for an excessive liquidity risk premium…amplifies the current distressed market conditions and their fire-sale prices in the calculation of fair value."
The SEC's report and recommendation to Congress is due in January.
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