On January 7, 2013, the Financial Accounting Standards Board (FASB) issued an exposure draft pertaining to the Financial Instruments topic of the FASB Codification. The purpose of this exposure draft was to clarify the scope and applicability of fair value measurement disclosures to nonpublic entities.
The disclosures are optional for nonpublic entities that have assets less than $100 million on the date of the financial statements and do not have any derivative instruments. If the entity meets these criteria, the entity is exempt from certain disclosures unless the information is required by another Codification topic. The disclosures include the levels of the fair value hierarchy that fair value measurements would be categorized within for assets and liabilities not stated at fair value on the statement of financial position but for which fair value is disclosed.
Comments were due January 22, 2013, since the FASB wanted to accomplish this clarification as quickly as possible under its due process procedures and make it effective upon issuance. The two specific questions asked were whether respondents agreed with this clarification and that the proposed amendment should be effective upon issuance. There were a total of thirteen respondents. All of the respondents generally agreed with the clarifications and immediate implementation; however, six of the respondents requested either modifications or further clarifications to the exposure draft as presented. Further information regarding these modifications or clarifications can be found here.
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