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IASB Amendments Make Banks Less Comparable

Tammy Whitehouse | November 17, 2008

Action by the International Accounting Standards Board to soften the blow of fair-value accounting for banks crippled by the credit crisis has produced a serious hit to real-time comparability, according to an analysis by Moody’s.

Under pressure to act during the peak of the credit crisis, the IASB amended International Accounting Standard 39, Financial Instruments: Recognition and Measurement, to allow banks to reclassify assets from a category designated as “available for sale” to another category called “hold to maturity.” The European community reasoned that the ability to reclassify assets was already available to banks reporting under U.S. Generally Accepted Accounting Principles, so IASB saw the move as necessary to assure comparability among global banks...

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