After receiving more than 350 letters on Proposed FASB Staff Position (FSP) FAS 157-e, the Financial Accounting Standards Board (FASB) met on April 2, 2009 to discuss the comments received in response to the exposure draft. The FSP will amend FAS 157 and FSP FAS 157-3.
What is the anticipated impact of FSP FAS 157-e? David Larsen, managing director in Duff & Phelps’ (D&P) San Francisco office and a member of D&P’s Portfolio Valuation Practice, has prepared an informative paper, FASB Meeting April 2, 2009: Insights on proposed FSP FAS 157-e, on developments from last week’s meeting. Larson—who also serves on FASB’s Valuation Resource Group, the AICPA Net Asset Value Task Force and the International Private Equity and Venture Capital Valuation (IPEV) Board of Directors—explains that for those entities that have utilized all available information and that have adjusted observable transaction data as facts and circumstances require, the new FSP will have little impact. For those entities that have relied heavily on “sticky” last transaction pricing, the new FSP will be expected to increase the level of effort and analysis necessary to reach a fair value conclusion for assets in markets that have become inactive. The FASB is expected to finalize the FSP today or on April 10th.
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