Finance Council Pans Derivatives Plan

NEW YORK CITY-Taking an “if it ain’t broke, don’t fix it” approach, the CRE Finance Council gives a thumbs-down to proposed changes in the accounting treatment of derivative instruments, impairment modeling and hedging activities. “We believe that the current approach, which is based on an entity’s business strategy, works well and is not in need of major changes,” the council says in a comment letter to the Financial Accounting Standards Board.

In its Sept. 30 comment letter, signed by president Lisa Pendergast and CEO Dottie Cunningham, the council says it “strongly believes” that the FASB and International Accounting Standards Board should work together “to produce a single standard for the accounting for financial instruments that is based on the current ‘business model’ approach,” rather than the “two very different standards” they’re working toward. Further, the group says the FASB’s proposed changes “do not represent an improvement in financial reporting and that the costs of implementing them significantly outweigh any perceived benefits.”