Fair Value Measurement
Guidance on measuring fair value is distributed across many IFRSs and it is not always consistent. Furthermore, the current guidance is incomplete, in that it provides neither a clear measurement objective nor a robust measurement framework. The Board believes that this adds unnecessary complexity to IFRSs and contributes to diversity in practice.
The Board’s objectives in the fair value measurement project are to:
- establish a single source of guidance for all fair value measurements;
- clarify the definition of fair value and related guidance;
- enhance disclosures about fair value measurements; and
- increase convergence between IFRS and US GAAP.
Where are we in the project?
The Board is in the process of redeliberating the proposals in the exposure draft Fair Value Measurement, together with the FASB.
The staff is analysing the responses to the request for input on the application of fair value measurement principles in emerging and transition economies. Based on the responses received, the Board will consider either (a) amending the proposals in the exposure draft for the final IFRS if they are found to be inadequate in some situations or (b) publishing educational material to address the practical application of the fair value measurement principles (or a combination of both). This educational material would seek to address the concerns that we have identified through our outreach activities and how they relate to the fair value measurement guidance in the forthcoming IFRS. The Board will discuss this at a future meeting.
What will happen next?
At their joint meeting in October 2009, the IASB and the FASB committed to work on developing converged fair value measurement guidance. The boards expect to complete their discussions in the first quarter of 2010.
Is this project part of the Memorandum of Understanding?
Yes, this project forms part of the Memorandum of Understanding between the IASB and the US Financial Accounting Standards Board (FASB) which sets out a Roadmap of Convergence between IFRSs and US GAAP 2006-2008.
Outreach activities
IASB members, technical staff and directors are available to speak either at an event on this project or regarding other IASB activities. Further information on speaking engagements is available here. Alternatively, contact Michael Wells (on 44 (0)20 7246 6438 or email mwells@iasb.org).