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 FSP EITF 99-20-a, "Amendments to the Impairment and Interest Income Measurement Guidance of EITF Issue No. 99-20," aims to achieve more consistent determinations of whether other-than-temporary impairments of available-for-sale or held-to-maturity debt securities have occurred. It is available for review and comment until Dec. 30.

Another proposed standard, FSP FAS 107-a, "Disclosures about Certain Financial Instruments," would increase the comparability of certain financial instruments that are economically similar but have different measurement attributes. Comments are due by Jan. 15.

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."

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