While the long-awaited exposure draft on fair value measurement of assets and liabilities published yesterday by the International Accounting Standards Board mirrors the US equivalent standard, SFAS 157, and lays the groundwork for achieving convergence with US GAAP, it signals both an end and a beginning for companies accounting for derivatives. Reval ceo and Co-founder Jiro Okochi says:
“The IASB’s new exposure draft signals the end of blaming the fair value accounting rules for the financial crisis, but it is just the beginning for companies who don’t leave themselves time enough to prepare for the challenges compliance will require. Companies will, no doubt, go through the same stages of denial, acceptance and then sometimes sheer panic as US companies have under FAS 157. The main challenge will be to find observable credit information to calculate proper fair values under the standard.”