*FASB issues proposals on mark-to-market guidance
*New rules may take effect for periods ending after 3/15
*IASB to also seek comments on FASB proposals (Adds IASB, comments, byline, BRUSSELS dateline)
By Emily Chasan and Huw Jones
NEW YORK/BRUSSELS, March 18 (Reuters) - The Financial Accounting Standards Board, which sets U.S. accounting rules, on Wednesday issued two proposals, intended to give companies more guidance on how to apply mark-to-market accounting rules.
U.S. lawmakers last Thursday pressured FASB to deliver new guidance on mark-to-market accounting within three weeks, or face legislation to relax the rule.
The two proposals relate to when companies are required to take write-downs on impaired assets, and how companies can determine whether a market is not active and a transaction is not distressed.
Mark-to-market, or fair value accounting, is aimed at giving investors an accurate view of financial companies’ books, but some banks and investors have blamed the rules for accelerating the financial crisis.
The London-based International Accounting Standards Board (IASB) also said on Wednesday that it was launching a public consultation over whether it should bring its rules in line with the United States in order to maintain a consistent global approach.
The IASB sets accounting rules used in over 100 countries that are mandatory for companies in the 27-nation European Union.
The boards are on a tight timeline to evaluate public comments and come up with new guidance for the market. FASB has scheduled a meeting on April 2 to discuss the proposals.
Business groups have been pleading with the FASB and the U.S. Securities and Exchange Commission to suspend or amend the rule so that banks will be able to account for their hard-to-value assets more favorably amid the distressed markets.
If the proposals are approved by the FASB, the guidance would be effective for interim and annual periods ending after March 15, 2009, FASB said.
The IASB said it will seek views on the FASB guidance before deciding on whether to publish formal proposals for public comment, a process that can take several months with no guarantee that any change will be made.
IASB Chairman, David Tweedie said that any change would be because of the commitment called for by the G20 group of nations for a consistent global approach to accounting rules.
“Whilst these are US proposals specifically targeted at US capital markets we have been asked by the G20 and others to deal with financial reporting issues on a globally consistent basis,” Tweedie said in a statement on Wednesday.
“For this reason we are seeking views about the FASB proposals from our fair value measurement expert advisory panel as well as other interested parties,” Tweedie added. (Reporting by Emily Chasan and Huw Jones; editing by Carol Bishopric)