The Financial Accounting Standards Board (FASB) has just released Statement No. 159 The Fair Value Option for Financial Assets and Financial Liabilities, the latest in the Board’s continuing effort to account for fair value reporting of financial instruments.

The new Statement applies to all entities, “including not-for-profit organizations,” says the Board's summary release. It also amends FASB Statement No. 115, Accounting for Certain Investments in Debt and Equity Securities, which applies to all entities with available-for-sale and trading securities. “The objective is to improve financial reporting by providing entities with the opportunity to mitigate volatility in reported earnings caused by measuring related assets and liabilities differently, without having to apply complex hedge accounting provisions.”

The Statement is effective as of the beginning of an entity’s first fiscal year after November 15, 2007. The FASB summary is available here; a full-text of Statement No. 159 appears here.