FASB exposure draft on Financial Instruments
On 26 May 2010 the FASB published a proposed Accounting Standards Update (ASU) that contains proposals for a new comprehensive standard on financial instruments. The exposure draft includes proposals on the classification and measurement of financial assets and financial liabilities, impairment methodology, and hedge accounting. The document will be available for comment until 30 September 2010.
Under the FASB’s proposals, many financial assets and financial liabilities would be measured at fair value in the primary financial statements. This is different from the mixed measurement model that is used in IFRS 9 Financial Instruments for financial assets.
Both boards are interested in feedback on the FASB’s exposure draft. Feedback will be helpful to the FASB when it redeliberates its proposals and finalises any requirements. The IASB will use that feedback when it considers how to reconcile any differences between IFRS requirements and US GAAP. Because this project is part of the global convergence project, it is important for the FASB to receive feedback on the proposed model from the international community. The IASB is asking their constituents to submit comment letters on the FASB proposal.
Click here to access the FASB exposure draft. The appendix to the exposure draft contains a high-level comparison of the boards’ respective approaches for reporting financial instruments.
Comment letters should be submitted directly to the FASB by 30 September 2010. Interested parties should submit their comments by email to director@fasb.org, File Reference No. 1810-100. Those without email should send their comments to “Technical Director, File Reference No. 1810-100, FASB, 401 Merritt 7, PO Box 5116, Norwalk, CT 06856-5116.” Do not send responses by fax.
The IASB exposure draft Amortised Cost and Impairment is open for comment until 30 June 2010. The IASB exposure draft Fair Value Option for Financial Liabilities is open for comment until 16 July 2010. The IASB requests that all interested parties also provide feedback on these two proposals.