US firms seek extension on fair-value compliance

An international group of financial executives has petitioned the US
standard-setter for more time to comply with the fair-value accounting standard.

Financial Executives International has asked the Financial Accounting
Standards Board to give companies an extension of a year, in order to comply
with the standard.

In a
to the standard setter,
said its members – representing 8000 corporations from the US and Canada – won’t
be ready by December 31 with proper implementation of the standard.

The valuation standard also affects about 40 other accounting standards.

‘We believe that this one-year deferral is necessary in order to resolve the
growing number of implementation issues and to enable companies to be in a
position to fully comply with the requirements of the standards,’ said Arnold
Hanish, FEI’s corporate reporting committee chairman, in the letter.

Hanish, who is also Eli Lilly’s chief accounting officer, also warned the
Public Company Accounting Oversight Board earlier this year that auditors would
need about two to three decades before they could fully master fair value

Further reading:

US think-tank criticises ‘absurd’ fair

Fair value: a fair cop?

Related reading

Fiona Westwood of Smith and Williamson.