Project Update

Disclosure Framework—Disclosure Review: Fair Value Measurement

Last updated on March 20, 2015. Please refer to the Current Technical Plan for information about the expected release dates of exposure documents and final standards.

(Updated sections are indicated with an asterisk *)

The staff has prepared this summary of Board decisions for information purposes only. Those Board decisions are tentative and do not change current accounting. Official positions of the FASB are determined only after extensive due process and deliberations.

*Project Objective and Overview
*Decisions Reached at Last Meeting
*Tentative Board Decisions Reached to Date
*Next Steps
*Board/Other Public Meeting Dates
*Contact Information
 

*Project Objective and Overview

The objective and primary focus of the Disclosure Framework project is to improve the effectiveness of disclosures in notes to financial statements by clearly communicating the information that is most important to users of each entity’s financial statements. Achieving the objective of improving effectiveness will require development of a framework that promotes consistent decisions about disclosure requirements by the Board and the appropriate exercise of discretion by reporting entities.

The objective of improving effectiveness will require development of a framework that promotes consistent decisions about disclosure requirements by the Board and the appropriate exercise of discretion by reporting entities. To achieve this objective, the Disclosure Framework project comprises two components: the Board’s Decision Process and the Entity’s Decision Process.

Currently four disclosure areas are being evaluated as part of the Disclosure Framework project. Each review will include (1) evaluation of existing disclosure requirements within the Topic after applying the concepts in the Board’s decision process and (2) promotion of the appropriate use of discretion by entities specifically within the Topic.

This page provides updates on the disclosure review of Fair Value Measurement (820-10-50). For information on the other three disclosure reviews, see the following:
  1. Inventory (330-10-50)
  2. Defined Benefit Plans (715-20-50)
  3. Income Taxes (740-10-50)
Additionally, disclosure requirements for Interim Reporting are being evaluated for modifications.

The FASB staff has developed a “Q&A: FASB’s Disclosure Framework Project” fact sheet which can be viewed here.

*Decisions Reached at Last Meeting (March 4, 2015)

The Board discussed potential changes to disclosure requirements for Topic 820, Fair Value Measurement, and made the following decisions to:
  1. Remove the following existing disclosure requirements:
    1. The policy for timing of transfers between levels
    2. The internal valuation processes for Level 3 fair value measurements
    3. The amount of and reasons for transfers between Level 1 and Level 2 of the fair value hierarchy
    4. For private companies, the change in unrealized gains and losses for the period included in earnings (or changes in net assets) related to recurring Level 3 fair value measurements held at the end of the reporting period.
  2. Modify the following existing disclosure requirements:
    1. For private companies, no longer require a reconciliation of the opening balances to the closing balances of recurring Level 3 fair value measurements. However, those companies would be required to disclose transfers into and out of Level 3 of the fair value hierarchy and purchases of Level 3 assets.
    2. For investments in certain entities that calculate net asset value, require disclosure of the estimated timing of liquidation of an investee’s assets and the date when restrictions from redemption might lapse only if the investee has communicated that information to the reporting entity, either directly or indirectly.
  3. Add the following disclosure requirement:
    1. The changes in unrealized gains and losses for the period included in other comprehensive income and earnings (or changes in net assets) for recurring Level 1, Level 2, and Level 3 fair value measurements held at the end of the reporting period. This addition would not apply to private companies.

*Tentative Board Decisions Reached to Date (As of March 4, 2015)

Tentative Board Decisions to Date

*Next Steps

The staff is researching uncertainty in measurement disclosures as they pertain to fair value measurement. This will be discussed at a future decision-making meeting.

*Board/Other Public Meeting Dates


The Board meeting minutes are provided for the information and convenience of constituents who want to follow the Board’s deliberations. All of the conclusions reported are tentative and may be changed at future Board meetings. Decisions become final only after a formal written ballot to issue a final standard.

*March 4, 2015 Board Meeting—Fair Value Measurement Disclosures
*February 18, 2015 Board Meeting—Flexible Disclosure Requirements
September 3, 2014 Board Meeting— Fair Value Measurement Disclosures and Potential Changes on the Basis of the Proposed Concepts Statement
April 4, 2014 Board Meeting—Field Study Results and Next Steps

*Contact Information

Nick Cappiello
Project Manager
ntcappiello@fasb.org

Melissa Maroney
Project Manager
mamaroney@f-a-f.org

Aarika Friend
Assistant Project Manager
afriend@fasb.org

Jaime Dordik
Assistant Project Manager
jadordik@fasb.org

Kelsey Jensen
Postgraduate Technical Assistant
kpjensen@fasb.org

Kristin Floyd
Postgraduate Technical Assistant
knfloyd@fasb.org