The Financial Accounting Standards Board has issued a proposal providing companies with the option to report financial assets and liabilities at fair value.
The board said that the change is aimed at simplifying accounting, as well as reducing the earnings volatility caused by differences in existing accounting rules. The new standard would allow companies to measure financial assets and liabilities at fair value selected on a contract-by-contract basis.
Companies will be required to display those values separately from those measured under different attributes on the face of the balance sheet.
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