The Financial Accounting Standards Board may alter its controversial proposal to enact fair value accounting rules, Reuters says.

The news service quoted a FASB board member, Lawrence Smith, acknowledging that the standards body was being influenced by widespread opposition to its plan to require companies to value financial assets based on what they would currently fetch in the market. Smith said his guess is that the Norwalk, Conn.-based FASB would eventually adopt a hybrid valuation model.

If FASB does alter its mark-to-market plans, it would remove a primary point of contention between it and the London-based International Accounting Standards Board, [] which are working together to craft global accounting standards. The IASB has said that financial instruments should be valued based on amortized costs.

In addition to a larger effort to merge U.S. and world accounting standards, the FASB and IASB are also fashioning insurance-specific accounting rules.

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