The Act became law on 3 October 2008. Deloitte Financial Reporting Alert 08-15 (PDF 27k) points out that impairment assessments are made as of the financial reporting date. The Alert states that 'the enactment of the Act on 3 October 2008 may not affect an entity's assessment, as of a prior reporting date, of its intent to hold an impaired security until forecasted recovery'.

 

The FSP addresses concerns raised by preparers of financial statements regarding measuring fair value in the current turbulent financial markets. Click to Download this Issue of Heads Up (PDF 146k).

 

The revised meeting agenda is Here.

Click for EFRAG Endorsement Advice (PDF 61k).

 

Click here to go to the preliminary and unofficial Notes Taken by Deloitte Observers at the meeting.

 

In his remarks, he reported on a 'historic summit of the Eurogroup at the highest political level in Paris' held on the previous day. "Our unanimous message yesterday was one of commitment to act together in a decisive and coordinated way in order to restore confidence and proper functioning of the financial system...." Mr Barroso indicated that "we will this week adjust EU accounting rules in order to be sure that EU financial institutions are not disadvantaged vis-à-vis their competitors in the United States". Click to Download Mr Barroso's Remarks.

 

• Override FSP FAS 157-3 and replace it with guidance that clarifies that fair value in illiquid markets does not include forced or distressed sales. [Click here for Information about FSP 157 -3]
• Provide guidance on 'other than temporary impairment' as requested in ABA's letters to the SEC and the FASB
• Suspend the proposal on accounting for securitizations
• Suspend work by accounting standard setters on any projects that would require fair value in any future accounting standards pending Congressional review of the study mandated by the Emergency Economic Stabilization Act

 

One of the recommendations in the statement relates to fair value measurements:

The pro-cyclical nature of fair value measurement of financial assets appears to have worsened the impact of the crisis on financial and non-financial corporations. It is vital that accounting standard-setters take up the issue and seriously consider amending fair value accounting rules for assets in markets where liquidity suddenly disappears.

Click to view Joint Statement on Financial Market Turmoil (PDF 193k).

In the update, IASB Chairman Sir David Tweedie states:

"This press release says two things. First, that guidance within IFRSs is already clear that distress sales should not be included in fair value measurement. Secondly, that recent guidance from the FASB is consistent with the findings of our own expert panel on illiquid markets.

Click to view the IASB press release (PDF 161k).

The amendments introduce into IFRSs the same possibility of reclassifications that is already permitted under US GAAP in rare circumstances. The amendments are effective 1 July 2008.

Click for IASB Press Release (PDF 168k).