Response to the FASB's Exposure Draft on Fair Value Measurements

The American Accounting Association (AAA) has charged the Financial Accounting Standards Committee with responding to requests for comment from standard setters on issues related to financial reporting. The Committee is pleased to respond to the Financial Accounting Standards Board Exposure Draft (ED), Fair Value Measurements, issued in Jun 2004. The opinions in this letter reflect the views of the individuals on the Committee and not those of the AAA. The ED proposes procedural guidance for measuring most fair value estimates required by other authoritative accounting pronouncements. This guidance would apply broadly to financial and nonfinancial assets and liabilities. The ED also proposes expanded footnote disclosure concerning the methods and inputs used to determine fair value estimates. The Committee supports the formulation of a single standard that provides guidance on fair value measurement. It is believed that such a standard would improve the consistency of fair value measurement across the many standards that require value reporting and disclosure.