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Friday, July 27, 2007

News: Exposure Draft on Fair Value Disclosure for Financial Instruments

On July 20, 2007, the Accounting Standards Board of Japan (ASBJ) issued an exposure draft that proposes mandatory disclosure of fair value of financial instruments.
The existing standard requires fair value disclosures only for marketable securities and non-hedge derivatives. The finalized standard would require fair value disclosure for all types of financial instruments, disaggregated by classes, maturities, purposes, and so on, unless the fair value is not readily determinable.
The proposed rule states that the currently required descriptive information about management's policies on controls over financial instruments, including derivatives, is extended to those for all financial instruments.
I would say that the proposed rule is quite similar to requirements of IAS 39 and SFAS 133(R). I really appreciate the ASBJ's effort on improvement over fair value disclosures.

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