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.
Continue Reading for Free
Register and gain access to:
- Thought leadership on regulatory changes, economic trends, corporate success stories, and tactical solutions for treasurers, CFOs, risk managers, controllers, and other finance professionals
- Informative weekly newsletter featuring news, analysis, real-world case studies, and other critical content
- Educational webcasts, white papers, and ebooks from industry thought leaders
- Critical coverage of the employee benefits and financial advisory markets on our other ALM sites, PropertyCasualty360 and ThinkAdvisor
Already have an account? Sign In Now
© 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.