Project Update

Disclosure Framework—Disclosure Review: Fair Value Measurement

Last updated on March 12, 2018. 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
Due Process Documents
*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. 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 (Section 820-10-50). For information on the other three disclosure reviews, see the following:
  1. Inventory (Section 330-10-50)
  2. Defined Benefit Plans (Section 715-20-50)
  3. Income Taxes (Section 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.

Due Process Documents

On December 3, 2015, the Board issued a proposed Accounting Standards Update, Fair Value Measurement (Topic 820): Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement. The due date for comment letters was February 29, 2016.

*Decisions Reached at Last Meeting (March 7, 2018)

The Board completed redeliberations of proposed Accounting Standards Update, Fair Value Measurement (Topic 820): Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement.

The Board made the following decisions:
 
Industry-Specific Disclosures
 
The Board decided not to pursue industry-specific fair value measurement disclosures.
 
Nonpublic Entity Disclosure Exemptions
 
The Board decided to exempt nonpublic entities from the following disclosure requirements:
  1. The changes in unrealized gains and losses for the period included in earnings (or changes in net assets) and other comprehensive income for recurring Level 3 fair value measurements held at the end of the reporting period
  2. The range and weighted average used to develop significant unobservable inputs for fair value measurements categorized within Level 3 of the fair value hierarchy
  3. A reconciliation of the opening balances to the closing balances of recurring Level 3 fair value measurements. 
In lieu of the Level 3 rollforward disclosure requirement, nonpublic entities will be required to disclose separately changes during the period attributable to the following:
  1. Purchases and issues
  2. The amounts of any transfers into or out of Level 3 of the fair value hierarchy and the reasons for those transfers. Transfers into Level 3 shall be disclosed and discussed separately from transfers out of Level 3. 
Disclosure Objective
 
The Board confirmed the proposed amendment to have a disclosure objective for Section 820-10-50, Fair Value Measurement—Overall—Disclosure.
 
Immaterial Disclosures
 
The Board confirmed the proposed amendments to eliminate “at a minimum” from the phrase “an entity shall disclose at a minimum,” which makes it difficult for an entity to justify omitting immaterial disclosures.
 
Transition
 
The Board confirmed the proposed transition guidance that an entity should apply a prospective method of transition for disclosure of the range and weighted average used to develop significant unobservable inputs for fair value measurements categorized within Level 3 of the fair value hierarchy. The Board decided to also require prospective transition for the narrative description of measurement uncertainty. The Board confirmed the proposed transition guidance that all other amendments should be applied retrospectively.
 
Effective Date and Early Adoption
 
The Board decided that the effective date for all entities will be fiscal years, and interim periods within those fiscal years, starting after December 15, 2019.
 
The Board decided to permit early adoption. 
 
Costs and Benefits
 
The Board decided the expected benefits justify the expected costs of the changes and directed the staff to draft an Accounting Standards Update for vote by written ballot.

A copy of the Board meeting handout can be found here.

*Tentative Board Decisions Reached to Date (As of March 7, 2018)

A list of the tentative Board decisions to date can be found here.

*Next Steps

The Board directed the staff to draft a final Accounting Standards Update for vote by written ballot.

*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 7, 2018 Board Meeting—Fair Value Measurement Disclosures
February 7, 2018 Board Meeting—Fair Value Measurement Disclosures
June 1, 2016 Board Meeting—Fair Value Measurement Disclosures
November 11, 2015 Board Meeting—Fair Value Measurement Disclosures
October 21, 2015 Board Meeting—Fair Value Measurement Disclosures
October 7,2015 Board Meeting—Fair Value Measurement Disclosures
July 9, 2015 Board Meeting—Fair Value Measurement Disclosures
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

Aarika Friend
Project Manager
afriend@fasb.org

Kelly Coyne
Postgraduate Technical Assistant
kcoyne@fasb.org

Francesca Roberts
Postgraduate Technical Assistant
froberts@fasb.org