Editing Financial Accounting Standards Board (section)

=== Mark-to-market ===
{{seealso|Fair value accounting and the subprime mortgage crisis}}
Critics argue that the 2006 SFAS 157 contributed to the [[2008 financial crisis]] by easing the mark-to-market accounting rule and allowing valuation of assets based on their current market price, rather than the purchase price.  Critics claim FASB changes to [[mark-to-market]] accounting were made to accommodate "banks with toxic assets on their books."<ref name="Taub">{{cite web|last1=Taub|first1=Stephen|title=FAS 157 Could Cause Huge Write-offs|url=http://ww2.cfo.com/accounting-tax/2007/11/fas-157-could-cause-huge-write-offs/|website=CFO|access-date=16 November 2017|date=7 November 2007}}</ref>
  
However, others from within the accounting profession assert that the mark-to-market system in fact provides greater transparency and stability by applying similar values to similar assets, regardless of whether they were bought or created internally by a firm.<ref name="Newman">{{cite web|last1=Newman|first1=Jeremy|title=In Defense Of Mark-To-Market|url=https://www.forbes.com/2009/08/18/mark-to-market-banks-economy-opinions-contributors-accounting.html#1e64ec2c2414|website=Forbes|access-date=16 November 2017|language=en}}</ref> They contrast this with the alternate "[[mark-to-model]]" system—said to be riskier, less transparent, and results in incomparable and inconsistent reporting.<ref name="Newman" />

Others say mark-to-market provides the most practical choice when valuing most assets, if there is understanding of the long-term effects, and obligation to a global position.<ref name="Newman"/> They counter that the banking issues went beyond failures in accounting and into major liquidity concerns, and that the accounting profession, FASB, and SEC were not responsible for the banking crisis.<ref name="Newman"/>

A report from the [[Harvard Business Review]] agreed that the mark-to-market accounting is not the direct cause of the financial crisis, but the lack of knowledge related to accounting standards by investors fueled the fire. Most investors at the time assumed that all of banks' assets were appraised at market prices, and that the writing down of bonds would cause banks to violate regulatory capital requirements.<ref name="Pozen">{{cite journal|last1=Pozen|first1=Robert C.|title=Is It Fair to Blame Fair Value Accounting for the Financial Crisis?|url=https://hbr.org/2009/11/is-it-fair-to-blame-fair-value-accounting-for-the-financial-crisis|journal=Harvard Business Review|date=November 2009|access-date=16 November 2017}}</ref>