Majority Do Not Favor Fair Value For Loans, Liabilities, FASB Told

At yesterday's (Oct. 27) Financial Accounting Standards Board meeting, FASB staff presented a summary of feedback received from over 2,800 comment letters and other feedback on FASB’s proposed changes to accounting for financial instruments.

Staff noted a majority of constituents do not favor fair valuing loans, core deposits, or liabilities, and that users generally do not support retention of the fair value option for financial liabilities, although nonusers support use of the fair value option for liabilities in certain circumstances.

(In other action at today's board meeting, FASB clarified that its proposal amending disclosure of loss contingencies - including lawsuits - would not be effective this year; see separate post in the FEI blog.)

On the subject of financial instruments, FASB’s official Summary of Board Decisions, notes that staff summarized significant feedback on the May 2010 Exposure Draft, Accounting for Financial Instruments and Revisions to the Accounting for Derivative Instruments and Hedging Activities—Financial Instruments (Topic 825) and Derivatives and Hedging (Topic 815), that FASB plans to redeliberate the proposed credit impairment and interest income recognition models jointly with the IASB beginning with the November 10-12 joint board meetings, and that FASB plans to begin redeliberations of its proposed classification and measurement approach in December.

If you had been a fly on the wall among the observers at FASB's board meeting (or a fly with headphones on listening to the webcast of the meeting like me), here are some additional highlights you would have heard from the live discussion.

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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

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