Fair Value Measurement

Date recorded:

The staff reviewed with the boards the decisions reached by the IASB in the development of their fair value measurement exposure draft that differ from those reached by the FASB in FAS 157.

The only item that was discussed in any real detail was the IASB's conclusions on the fair value of a liability.

A FASB member noted that the FASB was developing a FSP FAS 157-c Measuring Liabilities under FASB Statement No. 157, which would address many of the same issues. IASB members stated that the IASB's conclusions were based on the assumption that fair value remained the measurement objective. They did agree with the FASB's conclusions that in almost all instances in which it was suggested that this presumption was not valid could be disproved because the attributes which affected the measurement of the liability (for example, credit enhancement) were particular to the holder or issuer of the liability and not the instrument. But without hard data, they were uncomfortable with being unequivocal about that conclusion. A question would be raised in the Invitation to Comment asking whether there were any instances in which this presumption could be disproved.

There was a brief general discussion of various aspects of the project, but no new issues or positions were advanced.

In addition, the staff highlighted disclosures additional to those required by FAS 157 that the IASB would propose in the IASB's exposure draft. These were noted by both Boards without discussion.

The staff noted that the IASB expected to publish an exposure draft of the proposed IFRS on fair value measurement in 2Q 2009.

The staff also advised the FASB that the IASB had released a 'Request for Views' on 20 March 2009, containing the proposed FASB Staff Position FAS 157-e Determining Whether a Market Is Not Active and a Transaction Is Not Distressed and proposed FSP FAS 115-a FAS 124-a and EITF 99-20-b Recognition and Presentation of Other-Than-Temporary Impairments together with questions for IASB constituents. Comments were requested by 20 April 2009.

Other activities related to FAS 157 currently being undertaken by the FASB were noted.

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