Fair-value accounting for private-equity funds

As the worlds of accounting and politics collide how can we ensure greater transparency in the private-equity industry? Are fair value standards exacerbating the credit crunch?

Fair-value accounting standards have been accused of cranking up the credit crunch. Others argue that without the application of fair value, toxic loans might still be being made. In these testing economic times, the worlds of accounting and politics are colliding in a debate over the valuation of assets. Accountants, auditors, regulators and investors have been demanding greater transparency of the private-equity industry. When selecting a third-party provider of alternative investments, performance is the overriding criterion. Historically, there was a lack of consistency in approach t...