FASB Proposes Changes to Fair Value Disclosure Requirements
After a unanimous vote on November 11th, the Financial Accounting Standards Board (“FASB”) has ordered its research staff to draft a proposal for improving the footnote disclosure requirements under Topic 820, Fair Value Measurement. The forthcoming proposal would help businesses decide which information they disclose is important by eliminating several requirements that are viewed as redundant, providing changes to other rules, and focusing more on assets that are difficult to value. Additionally, the standard setter plans to add the following disclosure rules (for public business entities only):
- The changes in unrealized gains and losses for the period included in other comprehensive income and earnings for recurring Level 1, Level 2, and Level 3 fair value measurements;
- The range and weighted average of significant unobservable inputs for recurring Level 3 fair value measurements; and
- The historical time period, if any, used to develop these inputs.
The comment period for the fair value disclosure proposal will last 75 days or until Friday, February 26, 2016, whichever is longer.