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12 July 2008

US regulators willing to provide more guidance on fair value


The SEC plans to meet with other regulatory and standards setting bodies to shore up the guidance on fair value accounting. Implementation will be one of the chief issues addressed.

The SEC plans to meet with other regulatory and standards setting bodies to shore up the guidance on fair value accounting, and implementation will be one of the chief issues addressed.

“Some institutions have told us there are significant challenges in determining fair value, and continued improved guidance from regulators can help smooth out some of the rough edges”, said SEC Chairman Christopher Cox at the end of a panel discussion on fair value accounting the SEC held on July 9, 2008. “The SEC will meet with FASB and the PCAOB to consider the next steps.”

 

The discussion focused on the benefits of fair value accounting for investors, as well as the ongoing challenges for preparers and auditors of financial statements in the implementation of the current fair value standards.

 

Several panellists said fair value works just fine with liquid markets, but is a problem for lightly traded instruments where little price information is available. In the absence of better alternatives, panellists agreed further guidance from regulators could help solve certain implementation issues.



© Thomson Tax


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