The International Accounting Standards Board has issued educational guidance from an expert advisory panel on the controversial issue of fair value measurement when markets become inactive.

In conjunction with the 84-page report, the IASB also published an eight-page staff summary outlining the highlights of the major issues in the report and the context. The report and summary take into account recent documents issued by the U.S. Financial Accounting Standards Board and the Securities and Exchange Commission's Office of the Chief Accountant.

The report is the result of seven meetings of an expert advisory panel including auditors, preparers, regulators and users of financial statements. The panel identified practices that experts can use to measure the fair value of financial instruments when markets become inactive and practices for fair value disclosures in such situations. The report includes guidance about processes and the use of judgment.

The IASB plans to hold additional roundtable discussions in Asia, Europe and the United States, in conjunction with FASB, to gather further suggestions on enhancements to the guidance. The IASB and FASB are also setting up a high-level advisory group to provide advice to both boards on the reporting lessons from the credit crisis.

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