A year ago, “fair value” was largely an accounting concept, hotly debated by those with an interest but considered quite academic by the wider business world. Yet, since the credit crunch began and markets seized up, the concept’s merits and drawbacks have put accounting at the heart of heated arguments over valuations and writedowns.

A number of banks and insurers have publicly and privately lobbied regulators to relax the rules, complaining that the strict system has overstated their likely losses and has risked pushing the entire financial system into chaos by introducing a spiralling series of ever-decreasing values.