Fair value: The debate rages on
There's nothing like a fair value update to get people talking.
The International Accounting Standards Board is seeking public comment on IFRS No. 9, titled "Financial Instruments." It's a proposed replacement for IAS No. 39 that would limit "changes to the accounting for liabilities, with changes to the fair value option," the IASB reported. "The proposals respond to the view expressed by many investors ... that volatility in profit or loss resulting from changes in the credit risk of liabilities that an entity chooses to measure at fair value is counter-intuitive and does not provide useful information to investors."
Almost immediately, inboxes started buzzing on the AECM listserv. Questions flew the weekend round, with spirited debates on the role of fair-value accounting in new financial structures. Like most other issues that surface on AECM, the fair-value debate was fair and thought-provoking, and it proved the point that fair value is still a hot-button issue in the profession.
Like everyone, I have my opinions, and I'm sure you do, too. Join the debate by sending your comments to the IASB; they're being accepted until July 16, 2010.
Speaking of thought-provoking, be sure to check out Bruce Pounder's commentary on CFO.com titled "IFRS Risk: Not What You Think," in which he says "CFOs of U.S. companies are wasting time and money managing imaginary risks while completely ignoring real ones."
And if you want to learn more, check out these related MACPA programs:
- Spring 2010 town hall meetings / professional issues updates
- IFRS Update and Review of Complex Topics
- IFRS Essentials with GAAP Comparison: Building a Solid Foundation
- International versus U.S. Accounting: What in the World is the Difference?
- The Impact of IFRS and Other Global Standards on Private Entities