FASB's New Bank Valuation Challenge

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After all of the attention (and collective bitching) about hard-to-value, illiquid assets, FASB's revived interest in bank lawsuits is nothing short of dark comedy. One year after starting a probe into investor complaints that banks were a little light on providing "the likelihood, timing and amount of future cash flows associated with loss contingencies", FASB is back at it.

Companies would need to disclose the amount or an estimate of a claim, the maximum potential loss and likely insurance coverage along with details on a dispute's origin, its status, expected timing of a resolution and most likely outcome. A table would be required to display potential losses from litigation.

With any success, FASB may wind up establishing an impressive perpetual litigation feedback loop. The last thing banks need now is to be sued for providing inaccurate expected loss/gain estimates for the things they're being sued for.
FASB Weighs Disclosures Fought by Citigroup, JPMorgan [Bloomberg]

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