Valuation Resource Group GIves Input on Fair Value to FASB

By Eva Lang

On February 18, 2009, FASB announced the addition of two new FASB fair value agenda projects. The projects were added at the behest of the SEC and the Valuation Resource Group (a group of valuation and accounting professionals who provide the FASB staff and Board with information on implementation issues surrounding fair value measurements used for financial statement reporting purposes.)

The fair value projects address both application and disclosure guidance. The project on application guidance will address determining when a market for an asset or a liability is active or inactive; determining when a transaction is distressed; and applying fair value to interests in alternative investments, such as hedge funds and private equity funds. The project on improving disclosures about fair value measurements will consider requiring additional disclosures on such matters as sensitivities of measurements to key inputs and transfers of items between the fair value measurement levels.

The FASB Valuation Resource Group met on February 5, 2009 to provide input on fair value issues to the Board. The group was formed in June 2007, as a result of feedback received from constituents calling for the Board to address issues relating to valuation for financial reporting.