How FASB's Proposed Fair Value Measurement Amendment Impacts Alternative Asset Investors

There have been periodic amendments to the disclosure provisions of Accounting Standards Codification (ASC) Topic 820, Fair Value Measurements, over the years, but there have been few changes to the measurement provisions of the fair value standard over the past decade. In September 2021, the Financial Accounting Standards Board (FASB) released an exposure draft that proposes changing course from a provision added to ASC Topic 820 a decade ago, that being the ability to reflect market participant perspectives with respect to contractual restrictions.

Schedule: 11:00 a.m. – 12:00 p.m. EDT

Please join FASB Vice Chair James Kroeker and David Larsen, Kroll Managing Director, for a discussion focused on why FASB is proposing to eliminate the ability to reflect a market participant derived discount for securities that are contractually restricted from sale and what impact the proposed change will have on investment companies, in particular investors (limited partners).

Topics

• What are the provisions of the proposed amendment to ASC Topic 820?
• Why is FASB proposing to change current guidance that allows the impact of contractual restrictions to be considered when estimating fair value?
• Is there a practical or economic difference between a security that is legally restricted from sale and a security that is contractually restricted from sale?
• What are the reasons for and against the change?
• Does the proposed change impact the practical expedient for estimating the fair value of fund interests?
• If the proposed change is enacted, what are the transition provisions?

Speakers

• James L. Kroeker, Vice Chair, Financial Accounting Standards Board
• David L. Larsen, Managing Director, Kroll

CPE: credit will be provided.