Fair enough?

Fair-value accounting has been blamed for exacerbating the scale of the financial crisis, leading for calls from some politicians for it to be suspended. The accounting standards boards have rushed out clarifications on mark-to-market rules, but are they enough to pacify critics? By Christopher Whittall

Fair-value accounting has come in for stick over the past year. At first, the mutterings were largely confined to banks, weighed down by ever-growing writedowns on illiquid structured credit investments. More recently, politicians have got into the act, with some calling for mark-to-market accounting to be suspended or scrapped altogether.

The argument is simple: market prices on some complex instruments have been driven by illiquidity and investor fear, and no longer reflect fundamental value