I wish that I could take credit for changing their minds, but no one called me. That being said, I was happy to hear that the FASB is moving into a more flexible mind set regarding FAS 157.
Only time will what ultimately comes of this, but hopefully it won’t be as stupid as it has been to date.
Sorry, but what is FAS 157 about?
Comment by John Fontana — April 3, 2009 @ 1:06 pm
Please see original post
http://www.jasonmendelson.com/wp/archives/2009/01... />
Comment by Jason Mendelson — April 3, 2009 @ 1:39 pm
For long term holders of illiquid assets (like VC firms), the change is probably a good thing. After all, how do you value something no one else (or very few others) are doing. It's like trying to put a price tag on innovation (which is kind of what a term sheet is but I digress). My main concern with this change is that banks will mark up garbage CDOs and such to fantasy levels so as to not trash their balance sheets. I just don't trust bankers to do the right thing. To me, it's more of the same stuff that got us into this mess to start with and, by changing FAS 157, we've said to the bankers that it's okay to put the best face on the crap you're holding. I'm not in favor of the change.
Comment by DonRyan — April 3, 2009 @ 2:48 pm
i have to agree w/don. bottom line, the issue is that one size/rule will not fill all from VC to banks but this does seems like a bit fat sellout on the part of the FASB. I can't wait to see the spin the banks put on Q.091 (go early adoption!) results – and here i though that the auto makers jubuliant cries of "we were only down 36% in March (note no mention of the bottom line there)!" was good!
Comment by mr spot — April 3, 2009 @ 7:53 pm
I won't pretend to understand entirely if it's better or worse for the banks. I think that some discretion is important in valuing non-public assets. I can say without a doubt this is a major win for private equity and venture capital.
Comment by Jason Mendelson — April 4, 2009 @ 1:10 am
You know one thing, if you ask me a logical question, I see a lot of people or agencies, whatever you call it, thinks others are stupid and they are more intelligent. This is basic human nature..!
Comment by Search Engine India — January 2, 2010 @ 3:58 pm