Deloitte comments to IASB on FASB FSPs

  • Deloitte Comment Letter Image

22 Apr 2009

Deloitte's IFRS Global Office has submitted to the IASB a Letter of Comment on IASB's Request for Views on Proposed FASB Amendments on Fair Value Measurement and Impairment Requirements.

On 19 March 2009, the IASB requested views on what were, then, two proposed FASB Staff Positions. The FASB has since adopted the two proposals as final FSPs, along with a third related FSP dealing with disclosures, as follows:
  • FSP FAS 157-4, which provides guidance on determining fair value when market activity has decreased
  • FSP FAS 115-2 and FAS 124-2, which addresses other-than-temporary impairments for debt securities
  • FSP FAS 107-1 and APB 28-1, which discusses fair value disclosures for financial instruments in interim periods
The Deloitte letter to the IASB provides our detailed views on each of the final FASB Staff Positions and contrasts them with IFRSs. Here are two excerpts from our letter:
  • Regarding FAS 157-4, the Deloitte letter to the IASB states: We believe that the FASB Staff Position FAS 157-4 is broadly consistent with the principles of fair value in IFRSs and the Expert Advisory Panel document and therefore an amendment to IFRSs is not necessary. However, in light of the IASB's imminent release of an exposure draft on Fair Value Measurements, the IASB should consider whether the words used in the FASB Staff Position FAS 157-4 are consistent with the exposure draft and whether the wording of the exposure draft should be aligned with the FASB Staff Position FAS 157-4. In addition, the IASB should seek the views of the Expert Advisory Panel to establish whether differences in the words of the FASB Staff Position FAS 157-4 and the Expert Advisory Panel report are expected to have any practical effect.
  • Regarding FAS 115-2 and 124-2, the Deloitte letter to the IASB states: As noted in the request for views, the differences between U.S. GAAP and IFRSs with respect to scope, impairment triggers, impairment measurements, and recoveries are numerous and complex. A short term project to fully converge with FASB's amendment would entail substantial changes to IFRSs that would require significant efforts and would create unnecessary complexities (e.g., recognizing impairments of held-to-maturity securities that are not due to credit in other comprehensive income). Instead, we would encourage both Boards to expedite their work on a joint standard that would improve reporting for all financial instruments including impairment issues (e.g., loss recognition triggers, measurement of losses, recognition of recoveries, etc.).


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