Proponents of fair-value accounting rushed to defend new fair-value accounting rules last week as corporations blamed the rules at least in part for earnings tailspins.
Georgene Palacky, a director at the Chartered Financial Analyst Institute, says fair value is being used as a scapegoat for companies when problems are more likely tied to market conditions than accounting rules. “Fair-value accounting doesn’t create losses,” she says. “It reflects a company’s present condition.”
