FASB issues 'fair value option' exposure draft

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25 Jan 2006

The US Financial Accounting Standards Board has issued an exposure draft that would provide companies with the option to report selected financial assets and liabilities at fair value.

Under the option, any changes in fair value would be included in earnings. FASB's proposed 'fair value option' is similar to the one included in IAS 39 Financial Instruments: Recognition and Measurement. The intent of such an option is to reduce volatility in earnings caused by 'accounting mismatches' when different bases are used for measuring related financial instruments. The ED may be downloaded from FASB's Website. Comment deadline is 10 April 2006. Click for (PDF 12k).

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