FASB Delays Fair Value Requirement for Nonfinancial Items in New Basis Events
February 25, 2008
On February 12, 2008, the Financial Accounting Standards Board(FASB) issued FASB Staff Position, FAS 157-2, Effective Date of FASB Statement No. 157, which deferred the effective date of FASB Statement No. 157 from fiscal years beginning after November 15, 2007, to fiscal years beginning after November 15, 2008. FASB Statement No. 157, Fair Value Measurement, establishes a single definition of fair value and expands disclosure about fair value measurements. As a result of FAS 157-2, public and private entities have a one-year deferral period in applying fair value measurements pursuant to FASB Statement No. 157 when accounting for nonfinancial assets and nonfinancial liabilities in a business combination or other new business event. However, the deferral period does not apply to entities that, prior to the issuance of FAS 157-2, issued interim or annual financial statements including the application of the fair value measurement and disclosure provisions of FASB Statement No. 157. The FASB decided to grant the one-year deferral period to allow more time to resolve various implementation issues that have arisen, or may arise, including issues related to fair value measurements (i) of nonfinancial assets and nonfinancial liabilities that are acquired in a business combination, and (ii) in determining the impairment of nonfinancial assets and nonfinancial liabilities, because those fair value measurements often depend on unobservable inputs.
http://www.fasb.org/pdf/fsp_fas157-2.pdf