Last week, the Financial Accounting Standards Board (FASB) released its Proposed Accounting Standards Update—Financial Instruments (Topic 825): Clarifying the Scope and Applicability of a Particular Disclosure to Nonpublic Entities. The proposed ASU should clarify the scope as well as the applicability of any disclosure exemption that applies specifically to private companies and nonprofits, and that resulted from the recent ASU No. 2011-04, Fair Value Measurement (Topic 820): Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRSs.

The current proposal would clarify that the requirement to disclose “the level of the fair value hierarchy within which the fair value measurements are categorized in their entirety (Level 1, 2, or 3)” does not apply to private companies and nonprofits for items that “are not measured at fair value in the statement of financial position, but for which fair value is disclosed,” says a FASB advisory. Comments on the proposal are due soon, no later than Jan. 22, 2013.