EFRAG comments on IASB ED Measurement Uncertainty Analysis Disclosure for Fair Value Measurements
17 September 2010
In particular, the comment letter welcomes the clarification that the analysis is focused on unobservable inputs and by implication provides information about measurement uncertainty as opposed to market risk.
EFRAG finalised its comment letter in response to the IASB Exposure Draft Measurement Uncertainty Analysis Disclosure for Fair Value Measurements (Limited re-exposure of proposed disclosure) (the ED). The comment letter supports the proposed changes to the measurement uncertainty analysis disclosure. In particular, the comment letter:
· supports the rationale for changing the wording “reasonably possible alternative assumptions” and the convergence objective it achieves;
· agrees that correlation is an important factor in providing a meaningful analysis of measurement uncertainty where relevant; and
· agrees that correlation should only be considered in instances where its effect on the fair value measurement is significant.
Through its due process EFRAG noted that while most constituents agree that correlation provides useful information there are divergent interpretations of how to determine this correlation.
© EFRAG - European Financial Reporting Advisory Group
