Reuters: Regulatory News: US firms' liquidity risks may get more exposure

Reuters: Regulatory News Reuters.com is your source for breaking news, business, financial and investing news, including personal finance and stocks. Reuters is the leading global provider of news, financial information and technology solutions to the world's media, financial institutions, businesses and individuals. // via fulltextrssfeed.com

US firms' liquidity risks may get more exposure Jun 27th 2012, 21:09 Wed Jun 27, 2012 5:09pm EDT * Rule aims to expose more about liquidity risk * Liquid funds, obligations would have to be listed NEW YORK, June 27 (Reuters) - Companies would have to tell investors more about the risk of running short of liquid funds under a proposal from the board that sets accounting standards for U.S. companies. The proposal, issued on Wednesday by the Financial Accounting Standards Board, would also require more disclosures about risks that companies face when interest rates change. The risk of not having enough liquid funds was underscored during the 2008-2009 global financial crisis, when banks stopped lending to each other, forcing governments to step in with massive injections of cash. Under FASB's proposed rules, financial institutions would have to list various classes of financial assets and liabilities in a table, separated by maturity date and including off-balance-sheet items. All companies would have to list available liquid funds in a table, including unencumbered cash, high-quality liquid assets and access to borrowing. They would also have to beef up descriptions of liquidity risk. Financial institutions would also have to disclose how changes in interest rates would affect profits and shareholders' equity. FASB previously beefed up disclosure requirements for credit risk, which played a key role in the financial crisis. The board is seeking comments on the new proposal through September 25. It has not decided on an effective date. Link this Share this Digg this Email Reprints

You are receiving this email because you subscribed to this feed at blogtrottr.com. If you no longer wish to receive these emails, you can unsubscribe from this feed, or manage all your subscriptions