Contact: Eric Wohlschlegel
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October 29, 2008 

U.S. Chamber Welcomes Discussion on Fair Value Accounting
Calls for Review of Standards and Emergency Action if Necessary

WASHINGTON, D.C.—The U.S. Chamber Center for Capital Markets Competitiveness today welcomed the Securities and Exchange Commission’s roundtable discussion on fair-value accounting, and asked that the ongoing SEC study determine if the implementation of fair value standards exacerbated the current financial crisis and that corrective measures be taken if such a finding is made.

The SEC’s roundtable addressed the usefulness of FAS 157, the Financial Accounting Standards Board’s fair-value measurement standard, as well as its faults. Much of the debate focused on the difficulty and uncertainty in placing a value on assets in an inactive market.

“Accountants did not cause the current crisis, but accounting rules may have exacerbated it,” said Richard Murray, Chairman of CCMC’s Leadership Board and roundtable participant. “Accounting is intended to reflect economic reality, not drive it. However, in the current crisis, it may not be possible to avoid the relationship between the two. There is a need for a national policy on how that relationship should work.”

The Chamber has filed comments with the SEC, FASB, and IASB requesting an emergency review of fair value standards and for the use of corrective measures if unintended consequences were found with their implementation. Last week, the Chamber spearheaded a letter with five trade associations requesting that the SEC, in its recent clarification of fair value, elaborate on the use of judgment in valuing assets in an inactive market. Finally, the Chamber has also written to the PCAOB requesting that guidance also be given to auditors in the use of judgment in applying fair value standards. 

“Today’s roundtable is the start of a constructive discussion,” said Murray. “During these trying times, we must recognize the need for responsible business and professional judgment absent an excessive risk of liability.”

The U.S. Chamber of Commerce is the world’s largest business federation, representing more than 3 million businesses and organizations of every size, sector, and region.

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