Rule change marks shift from mark-to-market accounting

[CHIMO]

Canadian banks and other financial institutions will be able to postpone taking profit hits from plunging financial assets on their books under emergency new accounting rules designed to bring Canada in line with recent changes in the United States and Europe.

The Accounting Standards Board said Friday it has initiated amendments that will allow companies to shift financial assets out of accounting categories that require changes in fair value to be recognized in net income immediately.

The move away from so-called fair value or mark-to-market accounting is designed to make sure that Canadian rules are consistent with both international and U.S. standards, which have been changed to help financial companies better cope with the global market meltdown, the AcSB said in a news release.

AcSB chairman Paul Cherry sought to counter concerns raised by institutional investors and other parties that the changes would allow companies to conceal damage from investors.

http://www.globeinvestor.com/servlet/story/RTGAM.20081017.waccounting1017/GIStory/