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FASB Abandons Work on Fair Value for Non-financials

Tammy Whitehouse | November 6, 2008

Buried in more urgent priorities around measuring financial instruments at fair value, the Financial Accounting Standards Board has decided to abandon a project that sought to define where entities could elect fair-value measurement for nonfinancial instruments.

In early 2007, FASB adopted Financial Accounting Statement No. 159: The Fair Value Option for Financial Assets and Financial Liabilities to allow entities to make some choices about where they would measure instruments at fair value. The intention was to simplify accounting for derivatives and resolve a mismatch in measurement approaches that led to artificial earnings volatility.

FASB was still toiling on a second phase of the fair-value option project, however, in trying to define when companies could also elect fair value to measure non-financial...

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