Project Update

Interim Disclosures about Fair Value of Financial Instruments

Last Updated: May 6, 2009 (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
*Due Process Documents
*Decisions Reached at Last Meeting
*Summary of Decisions Reached to Date
*Next Steps
*Board/Other Public Meeting Dates
Background Information
Contact Information

Project Objective

The objective of this project is to increase the frequency of disclosures about fair value of financial instruments, both assets and liabilities recognized and not recognized in the statement of financial position subject to the scope of FASB Statement No. 107, Disclosures about Fair Value of Financial Instruments.

*Due Process Documents

On April 9, 2009, the Board completed this project with the issuance of FASB Staff Position (FSP) FAS 107-1 and APB 28-1, Interim Disclosures about Fair Value of Financial Instruments.

FSP FAS 107-1 and APB 28-1

Comment Letter Summary (January 2009 Proposed FSP FAS107-b and APB28-a)

Comment Letter Summary (December 2008 Proposed FSP FAS 107-a)

* Decisions Reached at the Last Meeting (April 2, 2009)

See minutes below.

* Summary of Decisions Reached to Date

See final FSP.

* Next Steps

None.

* 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 Statement, Interpretation, FSP, or Statement 133 Implementation Issue.

*April 2, 2009

Board Meeting—Redeliberations of proposed FSP FAS 107-b and APB 28-a and decisions on interim disclosures about fair value of financial instruments.

January 23, 2009

Board Meeting—Redeliberations of proposed FSP 107-a and decisions on disclosures about fair value of financial instruments.

December 15, 2008

Board Meeting—Decisions on disclosures about certain financial assets.

Background Information

The Board received extensive input from constituents (such as financial statement users, preparers, auditors, and regulators) on financial reporting issues related to the measurement and impairment of financial instruments.   Most users indicated that measuring financial instruments at fair value is more relevant than other measurements (such as amortized cost) in helping to assess the effect of current economic events on an entity.   Other constituents asserted that fair value is not as relevant when financial markets are inactive or distressed.  Generally, constituents agreed that additional disclosures would be helpful in understanding the different measurement attributes for financial instruments applied by an entity and would increase the usefulness of its financial statements.

The Board acknowledges that the number and variations of measurement attributes for financial instruments create complexity.   The Board recently added to its agenda a comprehensive joint project with the IASB to address these complexities related to recognition and measurement of financial instruments.     

However, to address on an interim basis the concerns raised about the lack of comparability resulting from the use of different measurement attributes for financial instruments, the Board decided that enhancing disclosures about fair value would improve the transparency and quality of information provided to users of financial statements.  In addition, the Board determined that the disclosures would allow for more robust discussions about financial instrument valuation between users and preparers.

Contact Information

Melissa Maroney
Project Manager
mamaroney@fasb.org

Upaasna Laungani
Assistant Project Manager
ulaungani@fasb.org