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FASB Backs Off Fair-Value of Loans Proposal After Opposition

The Financial Accounting Standards Board backed off from its plan to make banks use market values to calculate how much the loans on their books are worth.

The panel, which sets U.S. accounting standards, today approved a change to its proposal that will allow banks to report some financial instruments on their balance sheets at amortized cost, as they currently do, rather than at fair value. The biggest U.S. banks and the American Bankers Association had opposed the original plan.