FASB ITC on Reducing Complexity in Reporting Financial Instruments

The Financial Accounting Standards Board (FASB) issued an Invitation to Comment (ITC) on Reducing Complexity in Reporting Financial Instruments, including International Accounting Standards Board (IASB) Discussion Paper, Reducing Complexity in Reporting Financial Instruments. The ITC seeks input from constituents on whether there is a need for the FASB to add a project intended to simplify and improve standards for measurement of financial instruments and, if so, what kind of projects or approaches should be considered. It also requests feedback on the IASB Discussion Paper, which seeks similar information on improving measurement of financial instruments that may also be useful to the FASB. Responses to both are requested by September 19, 2008.

The ITC is issued as part of the FASB’s effort to simplify measurement requirements for financial instruments while providing clearer and more complete information to users. It describes how current measurement requirements cause complexity, discusses ways it might be reduced in the intermediate term, and suggests how using a single measurement attribute, such as fair value, could reduce complexity. The ITC is available at www.fasb.org.

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