FASB Statement No. 157, Fair Value Measurements, expands financial statement disclosures about estimates of fair value and provides enhanced guidance as to the methods used to estimate the fair value of assets or liabilities, among other requirements. Statement No. 157 is effective for financial statements issued for fiscal years beginning after November 15, 2007, and interim periods within those fiscal years. FASB Staff Position (FSP) No. FAS 157-2, Effective Date of FASB Statement No. 157, permits delayed application of the Statement for nonfinancial assets and nonfinancial liabilities, except for items that are recognized or disclosed at fair value in the financial statements on a recurring basis (at least annually), until fiscal years beginning after November 15, 2008, and interim periods within those fiscal years.
When Statement No. 157 is initially applied (whether in full or under the partial deferral), paragraph 39 states that disclosures required by the Statement, including those required in annual periods only, be disclosed in the first interim period (including financial information included in Form 10-Q by public entities). The following disclosures are required:
- For assets and liabilities that are measured at fair value on a recurring basis in periods subsequent to initial recognition, the entity must disclose information that enables users of its financial statements to assess the inputs used to develop those measurements and for recurring fair value measurements using significant unobservable inputs, the effect of the measurements on earnings for the period. To meet that objective, the entity must disclose certain information in accordance with Statement No. 157 for each interim and annual period separately for each major category of assets and liabilities.
- For assets and liabilities that are measured at fair value on a nonrecurring basis in periods subsequent to initial recognition, the entity must disclose information that enables users of its financial statements to assess the inputs used to develop those measurements. To meet that objective, the entity must disclose certain information in accordance with Statement No. 157 for each interim and annual period separately for each major category of assets and liabilities.
- The quantitative required disclosures must be presented using a tabular format.
- The entity is encouraged to combine the fair value information disclosed under Statement No. 157 with the fair value information disclosed under other accounting pronouncements in the periods in which those disclosures are required, if practicable. The entity also is encouraged to disclose information about other similar measurements (for example, inventories measured at market value under ARB 43, Chapter 4), if practicable.
In addition, if an entity has only partially adopted the provisions of Statement No. 157 in interim or annual financial statements, the following must be disclosed until Statement No. 157 is applied to all assets and liabilities within its scope:
- The fact that the entity has only partially applied the Statement.
- Each major category of assets and liabilities that are recognized or disclosed at fair value for which, in accordance with FSP No. FAS 157-2, the entity has not applied the provisions of Statement No. 157.
|
