Robert Rubin, less than a month removed from his post as senior counselor at Citigroup, is on record stating that forcing companies to mark down assets every quarter in order to reflect current value has "done a great deal of damage" (see Bloomberg article). While a proponent of fair-value accounting in the past, Rubin feels it does not perform well when there are few buyers willing to trade a particular asset. As an alternative, Rubin proposes a reserve accounting system, where assets are carried at cost, with reserves used to offset potential losses. Unfortunately, reserve accounting is not without its own issues, being linked to an increase in restatements in the past (see SmartPros article), and worries of its misuse for creative accounting (see Wikipedia article).


  1. LOU // January 28, 2009 at 6:20 PM