With a proposal that would let companies opt to report selected financial instruments at fair value, the Financial Accounting Standards Board has opened the possibility of a significant move toward more fair value measurement.The board has issued the proposal as an exposure draft in hopes that comments will support it as a reduction in the complexity of accounting and in volatility in earnings.

"This will provide a real simplification for entities that have related assets and liabilities that are affected by similar changes in the environment, such as changes in interest rate, but under current accounting standards might be required to be accounted for differently," said FASB member Leslie F. Seidman.

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