Deloitte comment letter on ED/2010/7 'Measurement Uncertainty Analysis Disclosure for Fair Value Measurements'

Published on: 07 Sep, 2010

We support the Board’s efforts to enhance the disclosures for fair value measurements that are categorised within Level 3 of the fair value hierarchy and the concept of a measurement uncertainty analysis disclosure for Level 3 fair value measurements.

However, we have concerns about whether the proposed measurement uncertainty disclosure in the ED is operational. Entities are likely to encounter operational difficulty in applying the proposed guidance because of a lack of clarity about:

  1. the threshold for identifying alternative inputs
  2. the inputs to use when there is a range of reasonable inputs and which techniques to use when there are multiple techniques (each with a range)
  3. the objective of the correlation assessment.

We recommend providing the necessary operational guidance for the areas noted above.


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