This exposure draft proposes an entity to disclose a measurement uncertainty analysis for fair value measurements categorised within Level 3 of the fair value hierarchy. The analysis would take into account the effect of correlation between unobservable inputs if such correlation is relevant when estimating the effect on a fair value measurement of a change in more than one unobservable input.

In its response to the IASB, the AASB expressed reservations in the proposals and stated “The proposed disclosures seemingly requires consideration of a range of many and varied alternatives in recalculating estimates of fair value, rather than alerting users to the specific areas of uncertainty that could change fair value significantly. Focusing on discrete ranges of uncertainty may erroneously imply that any amount within that range would be an acceptable measure of fair value. The AASB does not consider it the role of financial statements to disclose recalculated estimates of fair value”. The issue of a standard is currently scheduled for the first quarter of 2011.


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Rob Mackay
T +61 3 8635 1800
rmackay@moorestephens.com.au

www.moorestephens.com.au