A Securities and Exchange Commission (SEC) advisory committee has released its final recommendations to improve financial reporting for companies, analysts and investors. If adopted, certain recommendations could produce more uniform financial statements under an improved mixed-attribute accounting model and a single source of disclosure guidance.

The widely used mixed-attribute model measures certain assets and liabilities at fair value and others at historical cost, while affording companies some flexibility. However, because the model does not specify which measurement attributes should apply to different types of business activities, comparisons of performance between companies are harder to draw.

Compounding this complexity is the debate over the reliability of historical cost and fair value estimates. Since historical costs remain unchanged over time, companies use their judgment in devaluing an asset on their balance sheet. Nor is the fair valuation of lightly traded and non-traded assets and liabilities an exact science.

Complete your profile to continue reading and get FREE access to Treasury & Risk, part of your ALM digital membership.

  • Critical Treasury & Risk information including in-depth analysis of treasury and finance best practices, case studies with corporate innovators, informative newsletters, educational webcasts and videos, and resources from industry leaders.
  • Exclusive discounts on ALM and Treasury & Risk events.
  • Access to other award-winning ALM websites including PropertyCasualty360.com and Law.com.

© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.