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Journal entry — Disclosure framework — FASB makes tentative decisions about fair value disclosures

Published on: Jul 10, 2015

At its meeting yesterday, the FASB continued redeliberating fair value measurement disclosure requirements in connection with its disclosure framework project. Specifically, the FASB:

  • Discussed whether to amend existing, and add new, disclosure requirements to ASC 8201 regarding uncertainties in fair value measurements. The FASB instructed its staff to request stakeholders’ feedback on further categorizing the degree of uncertainty for Level 3 measurements within the fair value hierarchy (e.g., by indicating whether the measurement uncertainty is high or low).

Editor’s Note: The potential amendments and additional disclosure requirements related to categorizing the degree of uncertainty for Level 3 measurements within the fair value hierarchy could also potentially apply to a plan sponsor’s defined benefit plan disclosures.

  • Affirmed previous decisions that a private-company defined benefit plan sponsor would remove the reconciliation of beginning and ending balances for plan investments categorized as Level 3 within the fair value hierarchy (i.e., the Level 3 rollforward). Instead, a private company would only disclose transfers into and out of Level 3 and purchases of Level 3 assets within its defined benefit plan footnote.
  • Tentatively decided to amend ASC 820-10-50-6A (for investments that are measured at net asset value) to specify that the disclosures are required for the current period only. Further, these amendments would be incorporated into ASC 715 for sponsors of defined benefit plans.

The FASB intends to continue deliberating the project at a future meeting.

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1 For titles of FASB Accounting Standards Codification (ASC) references, see Deloitte’s “Titles of Topics and Subtopics in the FASB Accounting Standards Codification.”

Disclosure framework — FASB makes tentative decisions about fair value disclosures Image

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