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FASB response to the post-implementation review of fair value measurements

  • FASB (US Financial Accounting Standards Board) Image

Mar 10, 2014

FASB Chairman Russell Golden has submitted a letter to the Financial Accounting Foundation’s (FAF’s) Standard-Setting Process Oversight Committee stating that on the basis of the FAF’s post-implementation review (PIR) report on FASB Statement No. 157, “Fair Value Measurements,” the FASB will not need to “undertake a comprehensive review” of the standard.

On February 24, 2014, the FAF published a PIR report concluding that Statement 157 successfully met its objectives. However, some investors had difficulty understanding the fair value information provided in financial statements and when to apply certain requirements of the standard for employee benefit plans, not-for-profit organizations, and private companies. The FASB plans to address these concerns by “conduct[ing] research and outreach with stakeholders in connection with in-process projects and initiatives, such as the Disclosure Framework Project, the simplification initiative research project, the research project on accounting issues in employee benefit plan financial statements, and the ongoing involvement of the Private Company Council (PCC) and Not-for-Profit Advisory Committee (NAC).”

In addition, the report noted that some stakeholders experienced significant implementation costs, and it recommended that the FASB continue its efforts to summarize and clearly document its cost-benefit considerations and broaden its outreach activities. The FASB commented that it will consider the report’s recommendations as it finalizes improvements to its “external communications about the benefits and costs of proposals and final standards.”

The letter is available on the FASB’s Web site.

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