We learn from "Lehman Results Bring Cheer to Wall Street" (September 19) that Lehman improved its reported profits because of new accounting rules "allowing it to book as profits the reduction in value of some of its debt."

In other words, if the "fair market value" of your debt goes down--perhaps because the bond market considers you a worse credit risk--while you owe exactly the same amounts to your creditors as you always have, you can then declare a "profit." The "fair value" accounting theorists have thereby arrived at absurdity.

Alex J. Pollock is a resident fellow at AEI.