We comment on fair value measurement ED
29 Sep 2009
Deloitte Touche Tohmatsu has submitted comments on the IASB Exposure Draft Fair Value Measurement, which was published 28 May 2009. We are generally supportive of the proposal, though we have concerns about some aspects and make suggestions for changes.
An excerpt from our letter of comment on the ED: We support the Board's efforts to replace the existing guidance on fair value measurement in IFRS accounting literature with a single standard and strive for closer convergence with fair value measurement requirements in Accounting Standards Codification Topic 820 (ASC 820) Fair Value Measurements and Disclosures (formerly Statement 157), issued by the US Financial Accounting Standards Board (FASB). Global convergence is important as it serves to further reduce complexity and application issues that often result from inconsistent principles in similar US and international standards. Moreover, convergence of this draft IFRS will result in more consistent measurement of fair value among IFRS preparers and better comparability with entities preparing financial statements under US GAAP. Furthermore, we understand that full convergence to ASC 820 may not be appropriate in instances where the IASB ED has demonstrated a more conceptually superior principle. However, in areas where the IASB does agree with the principles in ASC 820, we recommend the verbiage be closely aligned as not to create wording differences that cause confusion among constituents....
Some proposals within the ED do not move the draft IFRS towards convergence and, we believe, have not been demonstrated to be conceptually superior to ASC 820. For example, such proposals include, but are not limited to, the most advantageous market concept, the definition of a 'knowledgeable' market participant, and the accounting (deferral) of certain day one gains and losses.