By: Ray Pfeiffer

Ray Pfeiffer — Wed, 18 Mar 2009 19:08:29 +0000

(The standard FASB employee disclaimer applies to my remarks that follow.)
To answer some of Rob’s questions:
The proposed effective date of the FSP is for periods ending after March 15, 2009 meaning that indeed preparers with, for example, March 31 reporting dates will have to apply this guidance if it is affirmed by the Board in its April 2 meeting.
My initial guess on the variability question is that it is hard to predict. The change in the trigger will likely reduce the number of impairments identified; and yet the ability of firms to exclude some or all of the measured impairment from net income may at the margin increase the number of impairments that are taken. Also affecting these predictions is the way in which auditors and preparers choose to implement the guidance. As we’ve seen with SFAS 157 and related FSPs, the rules have thus far related to fair value measurement have not been applied as intended by the FASB. Overall, it’s not entirely clear to me what the net impact might be.

Comments on: FSP FAS 157-e Proposes 2-Step Test for Determining Whether a Market is Not Active

By: Ray Pfeiffer