The Financial Accounting Standards Board has issued the first of two proposed standards intended to simplify the accounting for financial instruments in response to the financial crisis.
The first of two proposed FASB staff positions deals with the controversial issue of impairment. The proposed
Another proposed standard,
The proposed FSPs represent two of four short-term projects announced by FASB Chairman Robert H. Herz at the board's Dec. 15 meeting. In addition to these short-term efforts, Herz announced that the board has added to its technical agenda a comprehensive joint project with the International Accounting Standards Board to address the complexity in existing standards of accounting and reporting for financial instruments.
"Regaining investor confidence during this global credit crisis requires both immediate action and a plan for long-term improvement in the accounting for financial instruments," said Herz (pictured) in a statement. "By issuing these proposed FSPs, the FASB is taking immediate steps to reduce complexity and make the accounting for these instruments easier to understand."