Wednesday, April 18, 2007
The Blackstone Group IPO will test FASB's new fair-value accounting rule that allows management to estimate the current fair value of its investments even if not traded in public markets. Critics say it gives management too much discretion and can lead to Enron-type abuses. Further, it is difficult for public investors to assess the reasonableness of management's assumptions based on the information in the prospectus. See WSJ, Blackstone Tests Fairness of Using 'Fair Value' Rule.