FASB Votes To Issue Final Standard On Fair Value, OTTI, Disclosures

board meeting earlier today, FASB voted to issue three final FASB Staff Positions (FSPs) on fair value in inactive markets, other-than-temporary-impairment (OTTI), and a separate FSP to make certain annual disclosures of fair value quarterly. Some changes from the proposed versions of the FSPs, listed below, will be made based on comment letters received. The three FSPs were released in proposed form as:

  • Proposed FSP FAS 157-e, Determining Whether a Market Is Not Active and a Transaction Is Not Distressed, (the ‘157 FSP’)
  • Proposed FSP FAS 115-a, FAS 124-a and EITF 99-20-b, Recognition and Presentation of Other-Than-Temporary Impairments, (the ‘OTTI FSP’)
  • Proposed FSP FAS 107-b and APB 28-a, Interim Disclosures about Fair Value of Financial Instruments (the ‘107 FSP’)

Effective date
The effective date for all three standards (the upcoming final versions following from the three proposed FSPs listed above) is for periods ending after June 15, 2009.

Early application of the standards for periods ending after March 15, 2009 is permitted, but only as follows:

  • If you early adopt the 107 FSP , you must also early adopt the 157 FSP and the OTTI FSP
  • If you early adopt the 157 FSP, you must also early adopt the OTTI FSP, and vice versa, (i.e. if you want to early adopt one of that pair, you have to early adopt both), however, you do not have to early adopt the 107 FSP in order to adopt the others.
  • Retrospective application will not be permitted.

FASB Technical Director Russell Golden said he planned to ask staff to do a post-implementation review looking at some early adopters, and that review would begin in early May. He indicated information from that review would enable the staff “to bring to you any improvements necessary” before the mandatory adoption date.

The board agreed to make certain changes in the final FSPs, based on comments received on the proposed FSPs. Over 300 comments were received on the FSPs relating to 157 and OTTI.

At a press conference following the meeting, FAF President and COO Theresa Polley noted that the FAF met by conference call on March 16 and agreed that FASB, while following an accelerated due process for the 157 FSP and OTTI FSP, were in accordance with the minimum comment period established by FAF for FASB comment periods.

In response to questions from reporters as to whether, as asserted by some investor groups like the CFA Institute, FASB had compromised its independence and due process under political pressure, FASB Chairman Robert Herz noted the FASB had reached out to over 40 institutional investors, ratings agencies, and other investors, and found that while some agreed with CFA Institutes' views on the proposed standards, the majority did not.

Additional information on decisions reached at today's FASB meeting can be found here.

This blog

FEI Financial Reporting Blog provides highlights from SEC, PCAOB, FASB, IASB, and other regulatory news, including reporting under Sarbanes-Oxley Sect 404. It is written by Edith Orenstein, Director of Technical Policy Analysis at FEI

More from this blog

Bloggers crew

Steve Knowles has spent 25 years in business and practice in the UK, but he also worked in the states and the years haven't dulled his way of seeing an alternative view to everyone else, and every day is a new adventure.

38891

Joel M. Ungar, CPA is a lifelong resident of the Detroit area and a graduate of The University of Michigan. He is a principal with Silberstein Ungar, PLLC, a Top 15 auditor of SEC public reporting companies.

70028

Allan Boress, CPA, with over 25 years as a practitioner and consultant to the accounting profession. Mr. Boress is the author of 12 published books in 6 different languages, including a best-seller, The "I-Hate-Selling" Book.

43686

Larry Perry, CPA, CPA Firm Support Services, LLC, is the author of accounting and auditing manuals, author and presenter of live staff training seminars, and author of webcast and self-study CPE programs. He blogs about small audits, reviews, and compilations.

80696
Sandra Wiley, COO and Shareholder, is ranked by Accounting Today as one of the 100 Most Influential People in Accounting as a result of her prominent role as an industry expert on HR and training as well as influence as a management and planning consultant. She is also a founding member of The CPA Consultant's Alliance. Sandra is a certified Kolbe™ trainer who advises firms on building balanced teams, managing employee conflict and hiring staff.
17532

Maria Calabrese, CIR, Human Resources manager for Fazio, Mannuzza, Roche, Tankel, LaPilusa, LLC in Cranford, New Jersey, Maria's topics revolve around the world of: Mentoring, Performance management, and The "Y Generation," a.k.a. "The whY generation".

50679

William Brighenti is a CPA, Certified QuickBooks ProAdvisor, and Certified [Business] Valuation Analyst, operating an accounting, tax, and QuickBooks consulting firm in Hartford, Connecticut, Accountants CPA Hartford.

74579

Ken Garen, CPA, is the co-founder and President of Universal Business Computing Company (www.ubcc.com), a software development firm of high-volume, high-productivity accounting and payroll technology.

22454

Eva Rosenberg, MBA, EA, is the publisher of TaxMama.com, and author of the weekly syndicated Ask TaxMama column. She provides answers to tax questions from taxpayers and tax professionals worldwide.

58714

Amy Vetter, CPA, CITP is the CPA Programs Leader for Intacct Corporation responsible for leading the CPA/BPO Partners nationally.

31557
Brian Strahle is the owner of LEVERAGE SALT, LLC where he provides state and local tax technical services to accounting firms, law firms and tax research organizations across the United States. He also writes a weekly column in Tax Analysts State tax Notes entitled, "The SALT Effect." For more info, visit his website: www.leveragestateandlocaltax.com
95032
Scott H. Cytron, ABC, is president of Cytron and Company, known for helping companies and organizations improve their bottom line through a hybrid of strategic public relations, communications, marketing programs and top-notch client service. An accredited consultant, Scott works with companies, organizations and individuals in professional services (accounting, finance, medical, legal, engineering), high-tech and B2B/B2C product/service sales.
22487

Rita Keller is a nationally known CPA firm management consultant, speaker, author, mentor and blogger. She has over 30 years hands-on experience in CPA firm management, marketing, technology and administrative operations.

47358
Stacy Kildal is the mom of two fantastic kids, an Advanced Certified QuickBooks ProAdvisor, Certified Enterprise Solutions ProAdvisor, Sleeter Group Certified Consultant, a nationally recognized member of the Intuit Trainer and Writer Network, and co-host of RadioFree QuickBooks.
24352
Michael Alter's blog specializes in providing practical advice to those who seek greater profitability and practice management tactics that enhance deeper client relationships.
28320

Sally Glick, CMO, Principal, Marketer of the Year in 2003 and AAM Hall of Famer in 2007, leads a lively discussion of the constantly expanding roles of marketing and the professional marketers that drive this initiative in accounting firms of all sizes.

91257

The IMA Young Professionals Blog features the insights of IMA’s Young Professionals Committee. Committee members share advice and experiences on careers, continuing education, work/life balance, and other issues affecting young accounting and finance professionals.

29766

FEI Financial Reporting Blog provides highlights from SEC, PCAOB, FASB, IASB, and other regulatory news, including reporting under Sarbanes-Oxley Sect 404. It is written by Edith Orenstein, Director of Technical Policy Analysis at FEI.

102068

Sue Anderson has 30 years of experience in continuing education for accountants. Currently she is the program director for online CPE provider CPE Link.

54755

Jim Fahey is COO of Apple Growth Partners, a regional CPA firm in Ohio. His focus is on the effective and efficient use of technology within the firm by all team members.

36064
Caleb Newquist is the Editor-in-Chief of Sift Media US, overseeing content for both AccountingWEB and Going Concern.
61960

Leita Hart-Fanta, CPA, CGFM, and CGAP is the author of "The Yellow Book Interpreted" and owner of Yellowbook-CPE.com a website devoted to training for governmental auditors.

87292

AccountingWEB is more than just a U.S. team of journalists and financial and technology experts - we have an international side, too! Members of our British team who publish AccountingWEB.co.uk share their ideas, insights, and perspectives from across the pond.

48398