In April, the FASB squeezed out a trio of amendments to various fair value reporting standards, in response to Congressional coercion to “do something” about the financial crisis. The Congressional threat: if you don’t do something, we’ll legislate relief from your standards. 

    Those three amendments - FASB Staff Positions, or FSPs for short - become effective in the second quarter. Firms were permitted to adopt them early, in certain combinations of the standards. Because one of the FSPs blunted the reported earnings effect of writedowns of impaired securities holdings, an incentive exists for firms with shaky capital to adopt early. At least 94 firms adopted the trio of standards early; 20 of them were members of the S&P 500 financial sector. Early adoption of the FSPs spared them pain: without deploying them, the S&P 500’s financial sector would have reported half as much in earnings for 2009’s first quarter.