Fair Value

BRUSSELS, September 30, 2008 (AFP) – The European Union is considering a shake-up in accounting rules as part of measures aimed being drafted in response to the global financial crisis, an EU official said Tuesday. The idea is one among a series that are being looked into ahead of a high-level European economic meeting expected to be held soon in Paris, which is supposed to focus on how to ease tensions in the financial sector.

Currently, banks are required to book the current market value for assets on their balance-sheet under international accounting standards, which has forced some to take huge write-downs as the US mortgage market slumped.

“There’s reflection going on about accounting norms in the current circumstances,” and more specifically “the long-term pertinence” of market-to-market accounting, the official said on condition of anonymity..