Harms Comments on Bank's Efforts in Dealing with SFAS 157

Memphis, TN, May 24, 2008 --(PR.com)-- Travis W. Harms, CFA, CPA/ABV, a senior vice president at Mercer Capital, was recently quoted in an article published in Compliance Week, titled "Struggling on Values, Banks Fire at FAS 157," by Tammy Whitehouse.

In the article, published May 20, 2008, Harms comments on how banks are dealing with the ramifications of the Financial Accounting Standards Board’s FAS 157, Fair Value Measurements, in the context of the recent market turbulence.

As financial institutions continue to struggle in the current market environment, the American Bankers Association recently outlined numerous concerns about the new fair value guidance. Among their worries are that because of FAS 157’s reliance on market prices as an indicator of value, the low level of market activity and related pricing implications for certain financial instruments are affecting valuations of these securities. This, in turn, further deteriorates liquidity as the banks wait for markets to recover.

“A realized loss is one you’re never going to get back. The asset has gone down in value, you’ve sold it, and you took the loss,” Harms said in the article, explaining the perspective of reporting companies. “An unrealized loss is one that you may still have a chance to recover. The company may say, ‘I plan to hold the asset a long time and I’m convinced the decline in fair value is temporary, so why record the loss now and in the next period record the gain? Isn’t that introducing unnecessary volatility to my earnings?’”

Mercer Capital is a business valuation and investment banking firm serving a national and international clientele. They offer a broad range of consulting and investment banking services, including financial reporting and tax valuation, M&A advisory, fairness and solvency opinions, ESOP valuation services, and litigation support. For over 25 years, Mercer Capital has been bringing uncommon professionalism, intellectual rigor, technical expertise, and superior client service to a broad range of public and private companies and financial institutions located throughout the world.

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