FASB moves closer to IASB convergence

The FASB today moved a step further along its IFRS convergence journey with a proposal that would allow companies the option of reporting financial assets and liabilities at fair value.

Leslie F. Seidman, a FASB board member, said the proposal would help the FASB achieve further convergence with the International Accounting Standards Board (IASB). The IASB has already adopted a fair value option for financial instruments.

The FASB added that the change would simplify accounting and reduce earnings volatility caused by differences in current accounting rules.

If implemented, the new standard will allow financial assets and liabilities to be measured at fair value on a contract-by-contract basis. Companies will have to display these values separately from those measured under different attributes on the balance sheet.