The disclosure of fair value in financial reporting is of great interest and useful to preparers, auditors, users
and regulators. The purpose of our article is that the Discussion Paper on Fair Value Measurement (DP) which
International Accounting Standards Board (IASB) published in November 2006 is in analyzing.
The DP is aimed at addressing requests from a number of interested parties seeking additional guidance on
the measurement of fair value. International Financial Reporting Standards (IFRS) already require some assets,
liabilities and equity instruments to be measured at fair value in some circumstances. However, guidance on
measuring fair value is dispersed throughout IFRS and is not always consistent. The DP is not about expanding
the use of fair value in financial reporting, but about how to codify, clarify and simplify the guidance that is at
present dispersed widely in IFRS.
In the US the Financial Accounting Standards Board (FASB) has already issued an accounting standard in
September 2006, SFAS No.157 “Fair Value Measurements”, on which work was well advanced before the
IASB launched its own project. Three statements were issued by publicity of SFAS No157. The first issue is the
Exposure Draft “Fair Value Measurement” in June 2004, the second issue is Working Draft “Fair Value
Measurement” in October 2005, and revised Working Draft issued in March 2006.
SFAS No.157 establishes a single definition of fair value together with a framework for measuring fair value
for financial reports prepared in accordance with US generally accepted accounting principles. Consistently with
its commitment to the convergence of IFRS and US GAAP, IASB decided to use the US standard as the starting
point for its own deliberations. The DP is the first stage of the IASB’s fair value measurement project.
Comparing DP with SFAS No.157 and the three statements in our article, it comes out that DP almost agree
with SFAS No.157 as concerns fair value measurement concept.