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FASB 157 delayed ????
- Thread starter daddyeaux
- Start date
something is circulating
http://calculatedrisk.blogspot.com/2007/11/cnbc-fasb-157-delayed-one-year.html
http://calculatedrisk.blogspot.com/2007/11/cnbc-fasb-157-delayed-one-year.html
Seems delay does not apply to Level 3
FASB grants partial delay on fair value
By Andrew Osterland
November 14, 2007
The Financial Accounting Standards Board voted to defer the implementation date of FAS 157, its rule for how to mark to market assets and liabilities, for all non-financial items except for those already reported at fair value on a recurring basis.
The accounting standard, which FASB voted not to entirely defer last month, goes into effect for all companies starting tomorrow. It articulates a new framework for determining fair-value measurements of assets and liabilities, though it does not require that such measurements be made in any new areas. Many financial companies adopted the standard earlier this year and have struggled to implement it because of the tumultuous credit markets. The standard requires companies to maximize the use of observable market prices and inputs, and minimize the use of unobservable inputs in their valuations.
The standard also presents challenges for non-financial assets and liabilitiesâmost notably in the context of business combinations when companies have to fair value the assets and liabilities they acquire. âThe most prevalent areas that would be affected by a partial deferral would be in regard to business combinations and impairments of acquired assets,â said FASB practice fellow Brian Stevens last week.
Some observers questioned the decision. âItâs a little puzzling that [FASB] did so at all in that companies will still have to apply 157 to problem financial assets, which is a good thing, whereas the non-financial assets get the deferral,â said Jack Ciesielski, an analyst and principal in the firm of R.G. Associates.
Given that FASB intends to change the rules on accounting for business combinations, the board appears to have decided that the new valuation rules should wait until those changes are implemented.
FASB grants partial delay on fair value
By Andrew Osterland
November 14, 2007
The Financial Accounting Standards Board voted to defer the implementation date of FAS 157, its rule for how to mark to market assets and liabilities, for all non-financial items except for those already reported at fair value on a recurring basis.
The accounting standard, which FASB voted not to entirely defer last month, goes into effect for all companies starting tomorrow. It articulates a new framework for determining fair-value measurements of assets and liabilities, though it does not require that such measurements be made in any new areas. Many financial companies adopted the standard earlier this year and have struggled to implement it because of the tumultuous credit markets. The standard requires companies to maximize the use of observable market prices and inputs, and minimize the use of unobservable inputs in their valuations.
The standard also presents challenges for non-financial assets and liabilitiesâmost notably in the context of business combinations when companies have to fair value the assets and liabilities they acquire. âThe most prevalent areas that would be affected by a partial deferral would be in regard to business combinations and impairments of acquired assets,â said FASB practice fellow Brian Stevens last week.
Some observers questioned the decision. âItâs a little puzzling that [FASB] did so at all in that companies will still have to apply 157 to problem financial assets, which is a good thing, whereas the non-financial assets get the deferral,â said Jack Ciesielski, an analyst and principal in the firm of R.G. Associates.
Given that FASB intends to change the rules on accounting for business combinations, the board appears to have decided that the new valuation rules should wait until those changes are implemented.
On Oct 17, the FASB agreed not to defer the effective date of FASB Statement 157, Fair Value Measurement, in its entirety. At today's meeting, the staff reviewed various deferral alternatives. The Board voted on Alternative "B" - to defer the effective date of Statement 157 for one year for all nonfinancial assets and nonfinancial liabilities, except for those items that are recognized or disclosed at fair value in the financial statements on a recurring basis (at least annually).
More information about Alternative "B" is available in the Board meeting handouts, a link to which is provided at www.fasb.org. More details about what was decided today will also be posted shortly on www.fasb.org.
Communications Manager
Financial Accounting Foundation
More information about Alternative "B" is available in the Board meeting handouts, a link to which is provided at www.fasb.org. More details about what was decided today will also be posted shortly on www.fasb.org.
Communications Manager
Financial Accounting Foundation