RegulationAccounting StandardsSEC tells companies to lift lid off fair value

SEC tells companies to lift lid off fair value

US watchdog puts pressure on companies to provide more explanation on how they work out their fair value assumptions

The Securities and Exchange Commission has put companies on notice that
greater fair value disclosures will be needed this year.

The body dispatched letters to CFOs offering a helping hand as to how they
should apply new fair-value accounting rules, but also warned that they would
need to work harder to show how they reached their values.

Companies will now have to do more need to explain how they arrive at their
assumptions when valuing assets and liabilities which rely on mark-to-model
calculations where there is no actual trading market for these holdings.

The SEC expects the fuller disclosures to start being filed by May when the
quarterly filings are due.

Further reading:

Blaming
fair value – is it a fair cop?

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