FASB issued an invitation to comment on
Reducing Complexity in Reporting Financial
Instruments. FASB is seeking input from constituents
on whether there is a need for it to take on a
project intended to simplify and improve standards
for measuring financial instruments. The document
describes how current measurement requirements cause
complexity, discusses ways complexity might be
reduced in the intermediate term and suggests how
using a single measurement attribute such as fair
value could reduce complexity. FASB is
also requesting feedback on the International
Accounting Standards Board Discussion Paper,
Reducing Complexity in Reporting Financial
Instruments , which is included in the
appendix of FASB’s invitation to comment. The IASB
document presents approaches to the issue that
FASB also is considering. Responses to
both documents are requested by Sept. 19. The
invitation to comment is available at www.fasb.org/draft/
ITC_Financial_Instruments.pdf .
FASB voted to amend the derecognition
model for financial assets in Statement no. 140,
Accounting for Transfers and Servicing of
Financial Assets and Extinguishment of
Liabilities . The project was added
to the board’s agenda to resolve practice issues
related to rollovers of beneficial interests and
the permitted activities of a qualifying special
purpose entity (QSPE). The board voted to remove
the concept of the QSPE from Statement no. 140. As
a result, the scope exemption for QSPEs will be
removed from the consolidation guidance in FASB
Interpretation no. 46 (revised December 2003),
Consolidation of Variable Interest Entities
. The planned amendments to Statement
no. 140 will be exposed for public comment. For
information, visit www.fasb.org .
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