Comment: Proposed measurement chapter for FASB Conceptual Framework

In our letter responding to proposed Chapter 6 on measurement, which is the final chapter to the FASB’s recent refresh of the Conceptual Framework, we agree with the Board’s premise that measurement is anchored in prices and believe that the proposal will prove useful in guiding current and future decision-making and standard-setting efforts.

We offer a number of observations and suggestions to clarify the proposal, including the following highlights:

• The proposal focuses on the measurement of assets and liabilities but lacks guidance for other financial statement elements that may need to be measured, such as revenue, expenses, and equity.
• The Board proposes a single framework for considering the measurement of assets and liabilities, but we believe the framework may be more easily applied to assets than to liabilities.
• We would like to see more concise definitions and discussions of terms used in the proposal, including “entity-specific” and “market participant” exit price measurement systems.
• We also ask the Board to be more consistent in using the term “fair value,” to define the term “unique prices,” and to clarify how the proposal applies to nonexchange transactions.

Download our letter to read our comments.