NEW YORK (Oct. 1, 2010) - The Financial Reporting Executive Committee of the American Institute of Certified Public Accountants on Sept. 30 submitted to the Financial Accounting Standards Board its comments on the FASB’s Exposure Draft of a Proposed Accounting Standards Update, Accounting for Financial Instruments and Revisions to the Accounting for Derivative Instruments and Hedging Activities.
The FASB indicated that the proposal is intended to provide financial statement users with a more timely and representative depiction of an entitiy's involvement in financial instruments, while reducing complexity. The proposal represents a major change in accounting for loans and other financial instruments, in that almost all financial instruments will be carried at fair value. The AICPA does not believe that all loans should be carried at fair value as stated in our December 2009 letter to the FASB.
The AICPA supports the objective of the proposal but has many concerns about other specific aspects of the project and has made certain recommendations to FASB. Accounting for financial instruments is one of the areas that has been identified as a priority in the road to convergence with the IASB. The AICPA supports greater convergence with the IASB, but believes that changes are necessary in the proposed Exposure Draft to achieve that important goal.
A copy of the letter can be found at www.aicpa.org/press/FINREClettertoFASB.