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The report of the expert advisory panel is a summary of the seven meetings of experts who are users, preparers and auditors of financial statements, as well as regulators and others. In the report, the panel identifies practices that experts use for measuring the fair value of financial instruments when markets become inactive practices for fair value disclosures in such situations. The report provides useful information and educational guidance about the processes used and judgements made when measuring and disclosing fair value.
The IASB has also used the work of the panel to address the issues of disclosure, an area identified by the Financial Stability Forum (FSF) along with fair value measurement and off balance sheet accounting. The feedback from the panel was incorporated in the preparation of the exposure draft proposing improvements to IFRS 7 Financial Instruments: Disclosures published on 15 October and will be used in the development of the forthcoming standard on fair value measurement. The IASB expects to publish an exposure draft of that standard in 2009.
Commenting on the publication of the report, Sir David Tweedie, Chairman of the IASB, said:
The expert advisory panel has provided useful input to a number of projects and we are moving quickly to incorporate their valuable contributions into our standards. Round-table discussions in Asia, Europe and the United States, to be held jointly with the FASB, will provide additional opportunities to gather views on where further enhancements may be required. Added to this, the joint IASB - FASB high level advisory group now being set up will provide advice to both boards on the reporting lessons from the credit crisis.
The educational guidance can be downloaded from this Website at www.iasb.org/expert-advisory-panel from today. A comprehensive summary of the IASB response to the credit crisis is available via www.iasb.org/credit+crisis.
Press enquiries
- Mark Byatt, Director of Corporate Communications, IASB
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Email: mbyatt@iasb.org
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Email: shorn@iasb.org
About the Expert Advisory Panel
The panel was formed to assist the IASB in reviewing best practices in the area of valuation techniques and formulating any necessary additional guidance on valuation methods for financial instruments and related disclosures when markets are no longer active.
The panel’s discussions have provided insight into whether there is a need for additional guidance in this area. The remit of the panel was how to measure the fair value of financial instruments when markets are no longer active. The panel did not discuss whether fair value is an appropriate measurement basis for a particular financial instrument or class of financial instruments. The IASB is addressing this in its work on financial instruments and published in March 2008 a discussion paper Reducing Complexity in Reporting Financial Instruments, inviting comments by 19 September 2008.
The expert advisory panel comprised experts from users, preparers and auditors of financial statements, as well as regulators and others. Participants were selected on the basis of their practical experience with the valuation of financial instruments in the current market environment.
About the recommendations of the Financial Stability Forum
In April 2008 the Financial Stability Forum published a report to the G7 group of Finance Ministers and Central Bank Governors making recommendations for Enhancing Market and Institutional Resilience.
The report was the result of collaboration by the main international bodies and national authorities in key financial centres, including the IASB. It set out 67 recommendations, which were endorsed by the G7 on 11 April. Of the recommendations, three relate to enhancements to financial reporting. Those recommendations form the core of the IASB’s response to the credit crisis (see http://www.iasb.org/credit+crisis.htm). |