Guidance for Investors Regarding FASB's Mark to Market Proposal

Accounting Changes Proposed by FASB

The Financial Accounting Standards Board (FASB) has issued an exposure draft (proposal) that will significantly revise accounting for banking institutions. The proposal requires that all financial instruments be marked to market ("fair value") on the balance sheet – including loans. The revisions could radically change how investors and customers view banking institutions and could also change banking products. FASB often says that investors want mark to market accounting; however, in conversations with bank analysts and investors, ABA has found this not to be the case. Similarly, the International Accounting Standards Board (IASB) has found that investors do not want mark to market for assets held long-term, and the IASB rejected it in its final rule addressing which assets must use mark to market accounting, "IFRS 9".

The purpose of this web page is to help bank investors understand the proposal, to inform investors about how to write a letter to the FASB, and to provide a link for drafting and submitting a letter.

Understanding the proposal 

 Summary of the FASB proposal
 
 Copy of the Exposure Draft (218 pages)

 Banker Concerns with Mark to Market

 Frequently Asked Questions About Mark to Market Accounting

 Accounting Resources, including ABA position papers and what others are saying about Mark to Market Accounting

 A Summary of the ABA Letters submitted to FASB on this proposal.

Sample letter to FASB

 Sample Letter to FASB on Mark to Market.

Please note: This sample letter is for educational purposes only. Please write your own letter – the FASB does not appreciate "form" letters, and often discounts them in their analyses.

How to write to FASB

Due date: September 30, 2010. (Those who wish to participate in FASB's roundtable discussion must submit comments by September 1, 2010)

Where to send letter: By email to director@fasb.org, File Reference No. 1810-100. Those without e-mail should send their comments to:

Technical Director
Financial Accounting Standards Board
401 Merritt 7, PO Box 5116
Norwalk, CT 06856-5116
File Reference No. 1810-100

The FASB is providing a way for investors to submit their views online at their website through a survey. This may be useful; however, this should not be done in lieu of writing comment letters.

Note: Do not send responses by fax. We recommend sending comments in a letter format, even if sending by email. 

Writing Tips

  • All comment letters will be made public on FASB's website.
  • No "form" letters.  Please write your own letter, explaining your individual situation.
  • Let FASB know that you are an investor.
  • Remember that FASB's primary goal is to be sure that investors are receiving the appropriate information. Your letter should focus on why the information
    is not useful to investors, rather than focusing on emotion.
  • You may choose to write to the FASB on all the aspects of their proposals; however, it would be most useful to write on the "mark to market" portion, at a minimum.

Contact for further information:
Donna Fisher, (202) 663-5318, Mike Gullette, (202) 663-4986.