The Financial Accounting Standards Board reaffirmed an earlier vote against a blanket deferral of Statement 157, "Fair Value Measurements," but granted a deferral for some assets and liabilities.
The board decided that for fiscal years beginning after Nov. 15, 2007, companies would still be required to implement the standard for financial assets and liabilities as well as for any other assets and liabilities that are carried at fair value on a recurring basis in financial statements.
That means Statement 157 becomes effective as originally scheduled for the financial assets and liabilities of financial institutions. That has proven to be a challenge for many of these institutions this year, in the wake of the plunging credit and mortgage markets. The decision not to defer fair value measurements means they still will need to maximize the use of any observable market inputs.
However, FASB did decide to defer for one year the implementation of Statement 157 for other nonfinancial assets and liabilities, such as those arising from business combinations when a company acquires another's assets. An exposure draft will be issued in the near future on the partial deferral.
FASB also decided to add subtotals for financing, operations and investment that companies would need to use in their statements of financial position, cash flows and comprehensive income. The statements would contain categories for business, discontinued operations, financing, income taxes and equity, each with their own totals. The move is part of an effort to converge FASB's standards for financial statements with those of the International Accounting Standards Board.
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