FASB issues EDs on asset retirement, fair value.

In June 2004 FASB published an exposure draft (ED), Accounting for Conditional Asset Retirement Obligations, an Interpretation of FASB Statement No. 143 (www.fasb.org/draft/ed_prop_interp_aro.pdf), to clarify that a legal obligation to perform an asset retirement activity conditional on a future event is within the scope of Statement no. 143, Accounting for Asset Retirement Obligations. Therefore, the proposal would require that entities recognize a liability for the fair value of an asset retirement obligation conditional on a future event if the liability's flair value can be reasonably estimated.

The ED proposes factoring uncertainty surrounding the timing and method of settlement potentially conditional on future events into the measurement of the liability rather than its recognition. Comments are due August 1, 2004.

Also in June, FASB issued an exposure draft, Fair Value Measurements (www.fasb.org/draft/ed_fair_value_measurements.pdf), in response to companies' requests for improved guidance on this topic. The ED seeks to establish a framework for measuring Fair value that would apply broadly to financial and nonfinancial assets and liabilities, improving the consistency, comparability and reliability of the measurements. The proposed framework would clarify the fair value measurement objective and its application under other authoritative pronouncements (such as FASB Statement no. 107, Disclosures about Fair Value of Financial Instruments, and APB Opinion no. 21, Interest on Receivables and Payables). Thus, the ED would replace any current guidance for measuring Fair value in those pronouncements and expand current disclosures about the use of fair value to measure assets and liabilities. Comments are due September 7, 2004.