On May 28, the International Accounting Standards Board (the "IASB") published for public comment an exposure draft of guidance on fair value measurement, which borrows heavily from FAS 157. If adopted, the proposal would replace fair value measurement guidance contained in individual International Financial Reporting Standards ("IFRS") with a unified definition of fair value and authoritative guidance on the application of fair value measurement in inactive markets. The proposal reflects a long-term goal to achieve convergence between IFRS and US generally accepted accounting principles.
The IASB's starting point in developing the draft was FAS 157, and the proposals incorporate recent guidance on fair value measurement published by the Financial Accounting Standards Board (the "FASB"). The proposed definition of fair value is identical to the definition in FAS 157. Also, the IASB proposal applies the FAS 157 hierarchy and both FAS 157 and the IASB proposal explain how to measure fair value but do not tell financial statement preparers when it should be applied.
There are, however, differences between the IASB proposal and FAS 157. For example, unlike FAS 157, the IFRS standard would apply to leasing arrangements, and it addresses how to apply the exit price to equity instruments measured at fair value.
The four-month comment period ends September 28, 2009.
Press Release: IASB Publishes Draft Guidance on Fair Value Measurement (May 28, 2009)