IASB proposes to enhance its original proposal by requiring the measurement uncertainty analysis disclosure to reflect the interdependencies between unobservable inputs used to measure fair value in Level 3.
The International Accounting Standards Board (IASB) published for public comment further enhancements to a disclosure proposal on Level 3 fair value measurements that formed part of the IASB’s exposure draft Fair Value Measurement published in May 2009.
In the exposure draft, IASB proposed a three-level fair value hierarchy that categorises observable and non-observable market data used as inputs for fair value measurements. According to that hierarchy, Level 3 inputs are ‘unobservable inputs’ used for the fair value measurement of assets or liabilities for which market data are not available.
In response to comments received, IASB proposes to enhance its original proposal by requiring the measurement uncertainty analysis disclosure to reflect the interdependencies between inobservable inputs used to measure fair value in Level 3. Users of financial statements commented that this information would allow them to assess the effect of the use of different unobservable inputs on the fair value measurement.
The exposure draft Measurement Uncertainty Analysis Disclosure for Fair Value Measurements is open for comment until 7 September 2010.
FASB is publishing the proposals in the exposure draft Amendments for Common Fair Value Measurement and Disclosure Requirements in US GAAP and IFRSs. Both boards will consider the comments received on the exposure drafts jointly as they continue their discussions about fair value measurement.
IASB will publish on its website a comprehensive summary on the progress of its fair value measurement project, of which these proposals form part.
© IASB - International Accounting Standards Board
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