FASB drops plan to tweak fair value rule

The Financial Accounting Standards Board (FASB) had indefinitely postponed a proposasl to revise its notoriously complex accounting rules for derivatives.

The FASB had planned to simplify the rules, known as FAS 133, and eliminate differences between them and their International Financial Reporting Standards (IFRS), IAS 139, Financial Week reports.

But the proposed revision to FAS 133 would have eliminated a number of provisions which make it easier for companies to avoid having changes in the fair value of their derivatives affect their earnings. This drew complaints from preparers of financial statements and others and prompted the FASB to back down.

The board has withdrawn its proposal, and has not indicated if or when it will re-introduce a revised version.

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