FASB issues proposal on fair value reporting options, standard on reporting of hybrid financial instruments.

• Position: Accounting & auditing news

The Financial Accounting Standards Board has issued an exposure draft that would provide companies with the option to report selected financial assets and liabilities at fair value. Under the option, any changes in fair value would be included in earnings. The proposed standard seeks to reduce both complexity in accounting and volatility in earnings caused by differences in the existing accounting rules.

Current GAAP uses different measurement attributes for different assets and liabilities, which can lead to earnings volatility. The proposed standard helps to mitigate this type of accounting-induced volatility by enabling companies to achieve a more consistent accounting for changes in the fair value of related assets and liabilities without having to apply complex hedge accounting provisions.

A copy of the proposal may be downloaded from the FASB's Web site at www.fasb.org. Comments are due Apr. 10.

In a separate action, the FASB issued a final standard that it says improves the financial reporting of certain hybrid financial...