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Standard features: AI supports FASB fair value accounting standards proposals.

THE APPRAISAL INSTITUTE EXPRESSED SUPPORT of the Financial Accounting Standards Board's exposure drafts of two proposed accounting standards updates to investment companies and investment property entities in a Feb.15 letter.

The updates propose that entities meeting the definition of an investment company or an investment property be required to report all their investments at fair value. Changes in fair value from one reporting period to the next would be reported as part of net income. These updates would replace current U.S. accounting requirements that require the value of real estate investments be reported using historical cost and accumulated depreciation.

"Not only do we support the application of fair value requirements for the reporting of the real estate holdings of investment companies and investment property entities, but we believe that FASB and the (International Accounting Standards Board) should adopt more universal requirements for the use of fair value measurements for the reporting of the value of an entity's real estate assets (i.e., for non-investment companies and non-investment property entities)," the letter stated.

However, AI expressed disappointment with the revised definition of an investment company and with the limited applicability of the proposed investment property entity standard. Additionally, AI urged FASB to adopt disclosure requirements and to require the use of qualified valuation professionals, as is the case within IAS 40.

Read the comment letter at
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Title Annotation:UP front
Publication:Valuation Magazine
Date:Mar 22, 2012
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