ABA Critiques FASB’s Fair Value Measurement Disclosure Proposal

ABA last week offered a mixed review of the Financial Accounting Standards Board’s proposed changes to the fair value disclosure requirements for private entities. While ABA supports certain proposed reductions in the requirements, the association warned in a letter that other aspects of the proposal present undue operational costs and may even provide misleading information.

Among other things, the proposal drops current requirements for companies that are not public business entities to disclose assumptions related to the modeled fair value estimates, which ABA agreed would remove some of the costly auditing burden for banks.

However, the proposal would also expand certain other requirements related to assumptions made in estimates and the level of detail that certain disclosures must comply with. ABA raised questions about the usefulness of certain information, and highlighted concerns about the operational and cost burdens banks would incur as a result. A final standard is expected to take effect no earlier than the end of 2017.  For more information, contact ABA’s Mike Gullette.