Tuesday, October 14, 2008

International Accounting Standard Setters follow FASB on Fair Value

The International Accounting Standards Board stated in a press release this week that they agree with the FASB on their fair value guidance on applying fair value in inactive markets released last week. Just to avoid misinterpretation, the head othe IASB, Sir David Tweedie, added his own interpretation: “This press release says two things. First, that guidance within IFRSs is already clear that distress sales should not be included in fair value measurement. Secondly, that recent guidance from the FASB is consistent with the findings of our own expert panel on illiquid markets.”

As well, in response to political pressure, the IASB indicated that they would study
the matter of reclassifying a financial asset from ‘held-for-trading’ to “another category”, presumably “held to maturity”.

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