NORWALK, Conn. (3/19/09)--The Financial Accounting Standards Board (FASB) issued two proposed staff positions (FSPs) Tuesday evening intended to provide additional application guidance regarding fair value measurements and impairments of securities. The standards board expedited its consideration of the FSPs after getting some heat for Congress last week. At a hearing conducted by the House Financial Services subcommittee on capital markets, insurance and government-sponsored enterprises, Chairman Paul Kanjorski (D-Pa.) said he wanted FASB to work more quickly toward meaningful changes. Witness Bob Herz, FASB chairman, committed to having final guidance on the use of mark-to-market accounting in illiquid markets out within three weeks. FASB set a 15-day public comment period, ending April 1, for its proposed FSPs. If approved, both sets of guidance would be effective for interim and annual periods ending after March 15. FASB encourage its constituents to review the proposed FSPs and provide comment on whether they agree that the proposed FSPs would improve financial reporting. The board has scheduled an April 2 meeting to evaluate all comment letters and other input received on the FSPs. In summary,
* Proposed FSP FAS 157-e, called Determining Whether a Market Is Not Active and a Transaction Is Not Distressed, provides guidelines for making fair-value measurements more consistent with the principles presented in FASB Statement No. 157, Fair Value Measurements. * Proposed FSP FAS 115-a, FAS 124-a, and EITF 99-20-b, Recognition and Presentation of Other-Than-Temporary Impairments, is intended to provide greater clarity and consistency in accounting for and presenting impairment losses on securities.
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