Scott B. Price, CPA

FASB issues Additional Guidance Regarding Fair Value Disclosures

June 17, 2010

The FASB recently issued Accounting Standards Update (ASU) No. 2010-06 , Fair Value Measurements and Disclosures (Topic 820): Improving Disclosures about Fair Value Measurements.

Reporting entities will have to provide information about movements of assets among Levels 1 and 2 of the three-tier fair value hierarchy established by SFAS No. 157 , Fair Value Measurements (FASB ASC 820 ). They also will have to provide a reconciliation of purchases, sales, issuance, and settlements of anything valued with a Level 3 method, which is used to price the hardest to value instruments.

Entities will have to provide fair value measurement disclosures for each class of assets and liabilities.

The guidance will be effective for any fiscal year that begins after December 15, 2010, and it should be used for quarterly and annual filings, the FASB said.

(courtesy RIA)