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FASB Vote on Mark-to-Market Accounting Guidance

Thursday, April 2, 2009

On April 2, 2009, the Financial Accounting Standards Board took a vote at its board meeting to revise guidance issued in a proposed staff position related to mark-to-market accounting related to FAS #157, Fair Value Measurements based on comments letters received from IMA’s Financial Reporting Committee (FRC) and other organizations. A copy of the comment letter submitted to the FASB by the FRC entitled, “FASB Staff Position: Determining Whether a Market Is Not Active and a Transaction Is Not Distressed”, can be found on the IMA site.

The Board also affirmed its previous decision that the FSP would be applied prospectively and that retrospective application would not be permitted. The Board decided that the FSP would be effective for interim and annual periods ending after June 15, 2009, with early adoption permitted for periods ending after March 15, 2009. The Board decided that an entity early adopting this FSP must also early adopt FSP FAS 115-2, FAS 124-2, and EITF 99-20-2, Recognition and Presentation of Other-Than-Temporary Impairments. Additionally, if the entity elects to early adopt FSP FAS 107-1 and APB 28-1, Interim Disclosures about Fair Value of Financial Instruments, it must also elect to early adopt this FSP and FSP FAS 115-2, FAS 124-2, and EITF 99-20-2.

The description of the specific revisions for the FSP can be found on the FASB’s website at www.fasb.org.