SEC Wants More Fair Value Disclosures

The Securities and Exchange Commission has issued an addendum to an earlier letter it has sent to the CFOs of some public companies asking them to provide additional information about their fair value measurements, including credit risks and broker quotes.

The new letter, which the SEC sent Sept. 16, supplements a letter the commission sent back in March that identified various disclosure issues that CFOs should consider when preparing the Management's Discussion and Analysis section of their 10-Q quarterly reports. The additional items come in response to suggestions the SEC received at its recent public roundtables, but others seem to be in response to the expanding credit crisis. The March letter primarily went to the CFOs of financial institutions, but according to the Center for Audit Quality, the SEC has indicated the new letter is going to a wider variety of organizations.