FASB loosens asset valuation terms

The independent Financial Accounting Standards Board decided today that assets on the books of banks can be valued in an "orderly" manner. According to Reuters " FASB says the objective of mark-to-market accounting is to set a price that would be received by a bank in an "orderly" transaction in the current, inactive market. It says an "orderly" transaction for accounting purposes does not include the forced liquidation or a distressed sale of an asset." There is mixed emotion to this ruling but some analysts predict this could help battered bank shares rise as much as 20%. Critics claim this will decrease the transparency of evaluating assets potentially leading to more problems down the road in the troubled asset classes (at least I didn't say toxic). The effect could be very positive for real estate markets as this may help to loosen the credit markets as banks possibly can decrease the necessary reserves if the value of their assets rises feasibly allowing them more money to lend.