EU preparers, auditors and other stakeholders should take note of the IASB staff position on this SEC-FASB clarification on fair value accounting issued on 2 October 2008 which was also confirmed by the IASB in its press release on 14 October 2008. It should be highlighted that the IASB staff has reviewed that clarification and considers it consistent with IAS 39. In particular, the three committees take note and support that the clarification addresses among other issues the following topics:

• Management's internal assumptions. The use of management estimates that incorporate current market participant expectations of future cash flows, and include appropriate risk premiums is acceptable, when an active market for a security does not exist.
• Use of market quotes (eg, broker quotes or information from a pricing service) when assessing the mix of information available to measure fair value. Broker quotes may be an input when measuring fair value, but are not necessarily determinative if an active market does not exist for the security.
• The results of disorderly transactions are not determinative when measuring fair value. Distressed or forced liquidation sales are not orderly transactions. Determining whether a particular transaction is forced or disorderly requires judgement.
• Transactions in an inactive market can affect fair value measurements, they may be inputs when measuring fair value, but would likely not be determinative. The determination of whether a market is active or not requires judgement.