Big Six issue fair value paper

The six largest global firms have issued a paper on determining fair value in
response to concern among account users and preparers over the unstable market

Concerns were also raised by G7 finance ministers and Central Bank Governors
who requested the Financial Stability Forum to review and report on certain
aspects of the recent market turmoil, which included valuation issues.

The paper, issued through the Global Public Policy Committee, aims to
highlight the requirements of IFRS determining fair value of financial assets,
liabilities and related disclosures in the context of current market conditions.

In a statement today, the firms said the paper did not amend or interpret
IFRS but merely set out the requirements that have to be met when calculating
fair value.

A similar effort was made by the US Centre for Audit Quality in relation to
fair value calculations under US GAAP.

Dick Kilgust, chair of the firms’ Global Public Policy Committee said it is
important that the large firms have come together to work on these issues.

‘The valuation issues are complex and it is the first time that IFRS has been
applied extensively in difficult market conditions. While it is not our job to
provide interpretation of the standards or valuation guidance, we believe that
drawing attention to the key issues should promote compliance and consistency
around the world,’ said Kilgust.

Further reading:

the paper

Big ‘Six’ draw up bank audit blueprint

The credit crunch’s impact on year-ends

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