FASB working on fair value disclosure exemption for nonpublic entities


FASB is moving quickly to clarify the applicability of a certain fair value disclosure requirement to nonpublic entities.

In a Proposed Accounting Standards Update (ASU), FASB asks for public comment on a clarification that is intended to reduce confusion among stakeholders.

The proposal would amend Accounting Standards Update No. 2011-04, Fair Value Measurement (Topic 820): Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRSs.

If approved, the proposed amendment would clarify that private companies and nonpublic not-for-profits are exempt from the requirement to disclose the level of the fair value hierarchy within which the fair value measurements are categorized in their entirety (Level 1, 2, or 3) for items:

- That are not measured at fair value in the statement of financial position, but

- For which fair value is disclosed.

In December, stakeholders informed FASB that the 2011 amendments, codified in ASC Section 825-10-50, seemed inconsistent with the board’s intent regarding this topic. The stakeholders requested a timely clarification because the exemption relates to nonpublic entities that soon will be issuing financial statements for calendar year 2012. The 2011 amendments took effect for nonpublic entities for annual periods beginning after Dec. 15, 2011.

FASB decided to make the clarification as quickly as possible. Comments are due on the new ASU by Jan. 22, and the clarification would become effective upon issuance.

Ken Tysiac ( ktysiac@aicpa.org ) is a JofA senior editor.


Year-end tax planning and what’s new for 2016

Practitioners need to consider several tax planning opportunities to review with their clients before the end of the year. This report offers strategies for individuals and businesses, as well as recent federal tax law changes affecting this year’s tax returns.


News quiz: Retirement planning, tax practice, and fraud risk

Recent reports focused on a survey that gauges the worries about retirement among CPA financial planners’ clients, a suit that affects tax practitioners, and a guide that offers advice on fraud risk. See how much you know with this short quiz.


Bolster your data defenses

As you weather the dog days of summer, it’s a good time to make sure your cybersecurity structure can stand up to the heat of external and internal threats. Here are six steps to help shore up your systems.