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The CESR statement focuses on accounting issues regarding financial instruments in illiquid markets. The statement allows CESR to stress the importance of appropriate application of measurement and disclosure requirements.
With regard to the measurement of financial instruments CESR underlines that the distinction between active and non active markets is important. Also, the use of valuation techniques should be considered carefully and entails a significant amount of judgment.
CESR notes that clear disclosures are necessary for users to understand these aspects and their implications for the fair value measurements included in the financial statements. This includes publishing the most relevant criteria and accounting policies, and providing relevant information to the market. The statement also provides an example on how issuers could present a useful summary of their valuation procedures.
CESR expects to publish the final CESR statement in October 2008.
Deadline for consultation is