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Grant Thornton: Survey Of Statement 159 Usage To Come
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Posted by: Jack Ciesielski 4/20/2007 7:25 AM
A story on Yahoo! Finance about a Grant Thornton survey of controllers and CFOs showed that "less than 15 percent (14.18%) say they plan on making use of the fair value option."

Hmm. That's not inconsequential at all: it could be enough to introduce non-comparability into the broader financial reporting landscape.

On the other hand, the story doesn't mention the survey size, or the survey technique. And there's no full length story on the Grant Thornton website - at least not in the press room section - that might flesh things out a bit more.

Of those responding "yes, we're going for it", 84% said they expected to apply the option to financial investments and 68% said they'd apply it to equity method investments. Firm commitments will get the fair value treatment, said 68% of the respondents. But less than half said they'd be applying it to the debt issued by their own firm.

The one weird finding was to this question: "Early adoption of the fair value option is permitted only if Statement 157, Fair Value Measurement, is also adopted early. Do you plan to adopt Statement 157 early?

Yes, said 5.97 % of the respondents. No, said the rest. If the two standards (157 and 159) must be adopted simultaneously upon choosing the fair value option, how can 14% expect to take the option without early adopting 157? It's possible they don't understand that you can't do one without the other. That's not a comforting thought.
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