H. David Sherman, a Northeastern University accounting professor who wrote a book on fair-value accounting published earlier this year, is already at work on an expanded edition. He has much to expand on, given all the pronouncements, proposals and debates on the fair-value issue that have cropped up in recent months.

Sherman spoke with American Banker about the theory behind fair value, also known as mark-to-market accounting, and discussed the implications of actions taken by the Financial Accounting Standards Board (FASB), which is pushing for broader use of fair value in response to investors who want a clearer picture of what is sitting on companies' books. The FASB is examining whether it would make sense to bring all loans and deposits under the fair-value umbrella, even if banks have no intention of selling them.

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