The Group of North American Insurance Companies is asking the U.S. Financial Accounting Standards Board to rework proposed a fair value accounting disclosure proposal.
The GNAIE, New York, has submitted a comment on efforts by FASB, Norwalk, Conn., to set standards for disclosures involving situations in which “fair values are measured using non-market observable inputs.”
But the FASB should see, when it is trying to align its standards with international standards, whether global agreement on standards really exists, Kevin Spataro, chairman of GNAIE’s Accounting Convergence Committee, writes in the comment letter.
When a fair value measurement is affected by inputs that are not readily “market observable,” disclosures for the measurements should be “qualitative, focusing on the potential variability of reasonably possible significant inputs, the causes of that variance and how the reporting entity arrived at the reported fair value,” Spataro writes.
Otherwise, financial statement users may have trouble comparing disclosures from different companies, Spataro writes.