Project to replace IAS 39
At the IASB-FASB joint meeting in March, the boards tentatively decided to consider three possible measurement methods, with the aim of proposing an accounting model for financial instruments that uses two of those methods. The measurement methods the boards agreed to consider were:
- fair value - defined as an exit price in SFAS 157 Fair Value Measurements and in the forthcoming IASB exposure draft on fair value measurements;
- another remeasurement method, proposed by some FASB members, based on discounted cash flows; and
- amortised cost, (including an impairment approach for financial assets).
At this meeting the staff provided an update of how the project is progressing and its plans for the project. Under those plans, the Board will have decided on the basic measurement model by July 2009. Following that decision, the Board will then seek to complete the rest of the measurement model in the following two or three months.
The Board also discussed the amortised cost measurement method, including possible impairment approaches for financial assets. The session was educational. No decisions were made.
The staff also confirmed that they will hold a public education session of the Board on Tuesday 5 May to discuss the remeasurement method being proposed by some FASB members. Details of the meeting timing have been announced and are on the IASB website.