Deloitte Alert on proposed FASB FSP on FV measurement
02 Oct 2008
Deloitte (United States) has published an Alert on a proposed FASB Staff Position (FSP) that would amend FASB Statement 157 Fair Value Measurements to provide guidance on measuring fair values (FV) in illiquid markets.
Deloitte Financial Reporting Alert 08-12 (PDF 34k) points out that the FSP will not change the measurement principles in FAS 157 but will provide guidance for applying those principles in inactive markets by elaborating on the guidance that the SEC and FASB Issued Jointly on 30 September 2008 (see our Earlier News Story). Examples will be added to FAS 157 on:
- How entities' internal (entity-specific) assumptions should be considered in the measurement of FV for a financial asset when relevant market data does not exist.
- How observable market information in an inactive market affects FV measurements.
- How entities should consider the use of broker quotes or pricing services when assessing the relevance of inputs available to measure FV.