Thursday, October 16, 2008

Several Accounting Changes Done by IASB in response to the Global Financial Crisis in its article today, October 15, 2008 titled "Fair Value Tweaking on a Global Scale" said that "In response to the global credit crisis, the International Accounting Standards Board has made its third announcement in as many days about slight changes to fair value accounting rules. The proposal issued today is a tweak to IASB's financial instrument disclosure rule, which is out for public comment until December 15.

The proposal streamlines disclosure requirements related to changes in valuation techniques for financial instruments. Rather than specifying what circumstances trigger new disclosures, the proposal simply requires that any change in valuation techniques be disclosed - plus the disclosure must include the reason for making the switch. The draft rule, which is a proposed amendment to IAS 39, applies to each class of financial instruments a company holds."

Further, the article said that "Earlier in the day, accounting regulators from the European Union voted in favor of an IASB fair value rule revision issued on Monday. The revision allows companies to reclassify financial assets to avoid marking the assets to market in some limited cases. The proposal must still be approved by the EU Parliament before taking effect.

The reclassification rule, which is part of a revised IAS 39, was finalized on October 13, and mirrors an existing U.S. standard - FAS 115."

Explore more in here : Fair Value Tweaking on a Global Scale

On October 13, 2008, IASB issued amendments to IAS 39 Financial Instruments : Recognition and Measurement and IFRS 7 Financial Instruments : Disclosures that would permit the reclassification of some financial instruments.

The amendments to IAS 39 introduce the possibility of reclassification for companies applying IFRSs, which were already permitted under U.S. GAAP in rare circumstances.

Here is the link to the story : IAS amendments permit reclassification of financial instruments

Next, on October 14, 2008, IASB provided an update on its work to consider the application of fair value when markets become inactive.

In May 2008 and at the request of the Financial Stability Forum (FSF) the IASB established and Expert Advisory Panel to consider the application of fair value when markets become inactive. The Panel has since met on seven occasions, the latest of which was on Friday, 10 October.

Several issues were discussed and agreed by the Panel during the meeting.

Click here to explore : IASB provides update on applying fair value in inactive markets

Latest, on October 15, 2008, as part of the IASB's response to the credit crisis, IASB published for public comment proposals to improve the information available to investors and others about fair value measurement of financial instruments and liquidity risk.

The proposals also reflect discussions by the IASB's Expert Advisory Panel on measuring and disclosing fair values of financial instruments when markets are no longer active.

For more information, click the following link : IASB proposes improvements to financial instruments disclosures

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