April 7 (Bloomberg) -- Canada’s accounting regulator hasn’t made a decision on whether to follow its U.S. counterpart in relaxing mark-to-market accounting rules to help banks avoid further asset writedowns.

A decision will be made by the end of this month, said Paul Cherry, chairman of the Accounting Standards Board.

“The matter is important, and it’s being met with a matter of urgency,” Cherry said in a telephone interview from Toronto today. “We haven’t decided if we’re going to change anything.”

The move by U.S. regulators last week may allow banks to report higher profits by easing requirements to recognize fluctuations in the value of investments. Critics of the fair- value rule say it hurts banks by forcing them to book paper losses in the midst of the crisis.

The U.S. Financial Accounting Standards Board will allow companies to use “significant” judgment in valuing assets to reduce writedowns on certain investments, including mortgage- backed securities.

Canada’s six main banks have taken about C$19.6 billion ($15.9 billion) in pretax debt writedowns since the financial crisis began in 2007, a fraction of the $916.2 billion recorded by banks and brokers worldwide, according to Bloomberg data.

The National Post reported earlier today that the Canadian regulators would move against the U.S. in relaxing the rules, citing people it didn’t name.

Cherry said members of the board’s oversight council met in an “informal briefing session” yesterday. The Accounting Standards Board, which makes decisions on accounting rules, hasn’t met on the matter, he said.

“The thing that we’re most sensitive to is whether new standards are compatible with international standards,” Cherry said. “Our banking system is quite different from the U.S.”

European Union ministers said on April 4 it’s “critical” that convergence on accounting standards is reached on the continent to ensure that the region’s banks aren’t at a disadvantage against U.S. competitors. The International Accounting Standards Board will discuss fair-value accounting on April 23 and 24, the Canadian group said in a statement.

To contact the reporter on this story: Sean B. Pasternak in Toronto at spasternak@bloomberg.net.

Last Updated: April 7, 2009 12:52 EDT