When is a loss a loss? That is the question.

Unfortunately, there appear to be two answers.

Under the proposal by the London-based International Accounting Standards Board, which writes the accounting rules for most countries outside the U.S., banks would book loan losses based on future expectations that the losses will occur. That will speed up the booking of losses -- currently, banks don't record loan losses until there is evidence they have actually happened, an approach that many observers believe led them to be too slow in taking losses during the financial crisis.

The IASB proposal, which was widely expected, spotlights a conflict with the Financial Accounting Standards Board, which writes U.S. accounting rules. The FASB issued a proposal in December that would shift U.S. banks to the expected-loss standard, but the two boards differ on exactly when losses would be booked: If both proposals are approved, U.S. banks could be booking more losses more quickly than their foreign counterparts.

Global Proposal Differs with U.S. on Bank Rules [Dow Jones via Fox Business]