NEWS RELEASE 02/09/11
FASB Discussion Paper Seeks Input on Issues about Hedge
Accounting
Norwalk, CT, February 9, 2011—The Financial
Accounting Standards Board (FASB) today issued a Discussion Paper to solicit
input on how to improve, simplify, and converge the financial reporting
requirements for hedging activities.
In May 2010, the FASB proposed its
revisions to improve and simplify standards for financial reporting of financial
instruments, including hedge accounting guidance, in its proposed Accounting
Standards Update (Update), Accounting for Financial Instruments and
Revisions to the Accounting for Derivative Instruments and Hedging
Activities—Financial Instruments (Topic 825) and Derivatives and Hedging (Topic
815). In December 2010, as part of its project to improve the accounting
for financial instruments, the IASB issued its Exposure Draft (ED), Hedge
Accounting, which seeks to align hedge accounting more closely with risk
management while addressing inconsistencies and weaknesses in the existing hedge
accounting model.
Differences exist between IFRS and U.S. GAAP relating
to hedge accounting. The revisions proposed by the IASB in its ED would result
in more differences compared with the FASB’s current and proposed hedge
accounting guidance. The FASB Discussion Paper asks stakeholders whether the
IASB’s proposals are a better starting point for any changes to U.S. GAAP as it
relates to derivatives and hedging activities.
“The FASB is issuing this
Discussion Paper to determine whether our constituents think the IASB’s proposed
changes would improve the accounting for hedging activities,” stated FASB
Chairman Leslie F. Seidman. “The information received during the comment period
will be helpful to both the FASB and the IASB as we deliberate issues pertaining
to hedge accounting.”
In addition to soliciting written comments on the
FASB’s Discussion Paper, the FASB plans to participate in the IASB’s discussion
of comments received on its ED, as well as input received on the FASB proposed
Update, in the second quarter of 2011.
The Discussion Paper is available
at www.fasb.org. Written
comments on the documents should be submitted by April 25,
2011.
About the Financial Accounting Standards
Board
Since 1973, the Financial Accounting Standards Board has
been the designated organization in the private sector for establishing
standards of financial accounting and reporting. Those standards govern the
preparation of financial reports and are officially recognized as authoritative
by the Securities and Exchange Commission and the American Institute of
Certified Public Accountants. Such standards are essential to the efficient
functioning of the economy because investors, creditors, auditors, and others
rely on credible, transparent, and comparable financial information. For more
information about the FASB, visit our website at www.fasb.org.