Project Update

Nonpublic Entities—Clarification of a Fair Value Disclosure Requirement

Last updated on February 11, 2013. 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
*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 clarify the scope and applicability of a fair value disclosure to nonpublic entities that resulted from the issuance of Accounting Standards Update No. 2011-04, Fair Value Measurement (Topic 820): Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRSs.

*Due Process Documents 

On February 7, 2013, the FASB issued Accounting Standards Update, Financial Instruments (Topic 825): Clarifying the Scope and Applicability of a Particular Disclosure to Nonpublic Entities.

*Decisions Reached at Last Meeting (January 31, 2013)

Please see Board Meeting minutes below.

*Summary of Decisions Reached to Date

Please see Accounting Standards Update No. 2013-03.

*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 standard.

January 31, 2013 Board Meeting—Preballot Draft, Comment Letter Analysis, and Balloting
December 19, 2012 Board Meeting—Clarification of Nonpublic Entity Disclosure Exemption

*Background Information

Issued in May 2011, Accounting Standards Update 2011-04, Fair Value Measurement (Topic 820): Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRSs amended fair value disclosure requirements in Topics 820 and 825, and required nonpublic entities to apply the amendments for annual periods beginning after December, 15, 2011.

The due process surrounding Update 2011-04 indicated the Board’s intent to exempt nonpublic entities from the disclosure of “the level of the fair value hierarchy within which the fair value measurements are categorized in their entirety (Level 1, 2, or 3)” for items that are not measured at fair value in the statement of financial position but for which fair value is disclosed.

Several stakeholders expressed concern that contrary to the intent of Update 2011-04, the amendments to Topic 825 suggested that nonpublic entities, particularly those that have total assets of $100 million or more or have one or more derivative instruments, would not qualify for the intended exemption. As such, this project aimed to clarify the scope and applicability of the disclosure requirement.

Contact Information

Ron Bossio
Senior Project Manager
rjbossio@fasb.org

John Gillard
Postgraduate Technical Assistant
jcgillard@fasb.org