by Laura Conaway

First the news, from AP:

The independent Financial Accounting Standards Board voted to adopt new guidelines under the so-called mark-to-market accounting rules, which require companies to value assets at prices reflecting current market conditions.

The changes will allow the assets to be valued at what they would go for in an "orderly" sale, as opposed to a forced or distressed sale. The new guidelines will apply to the second quarter that began this month.

Now an analyst's take, after the jump.

 

Marc Chandler of Brown Brothers Harriman says he expects another announcement from the FASB folks today that deals with "permanently distressed" assets. Chandler writes:

Although it seems clear that the political pressure brought to bear on FASB helped expedite the decision, this seemed to be the direction that they were moving. Cynics will claim this is a thinly veiled attempt to disguise the seriousness of the financial crisis and losses being faced. On the other hand, there are many who see the mark-to-market as an unreasonable demand for financial instruments with no markets. Regardless though of the merits or de-merits, the net impact could help boost bank earnings, reduce the need for capital injections and may help encourage participation in P-PIP [Public-Private Investment Programs] and TALF [Term Asset-Backed-Securities Loan Facility] programs.