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A88615 1 (2007-04-16)

handle is hein.gao/gaobadvvu0001 and id is 1 raw text is: G AComptroller General Accountability * Integrity * Reliability of the United States United States Government Accountability Office Washington, DC 20548 April 16, 2007 Mr. Robert H. Herz, Chairman Financial Accounting Standards Board 401 Merritt 7 PO Box 5116 Norwalk, CT 06856-5116 File Reference No. 1520-100 Subject: Financial Accounting Standards Board's (FASB) Invitation to Comment: Valuation Guidance for Financial Reporting This letter provides the U.S. Government Accountability Office's (GAO) comments on the FASB's Invitation to Comment: Valuation Guidance for Financial Reporting The FASB staff has requested input on establishing valuation guidance for financial reporting purposes. We believe that standards, such as Statement of Financial Accounting Standards (SFAS) No. 157, Fair Value Measurements, provide sufficient valuation guidance for these purposes. Rather than issuing additional detailed implementation guidance, we believe that the accountability profession will be best served by allowing flexibility in selecting the appropriate valuation methodology or approach to address the facts and situations that reporting entities encounter within the broad requirements of SFAS 157 and the relevant qualitative characteristics set forth in Statement of Financial Accounting Concepts No. 2, Qualitative Characteristics of Accounting Information, such as neutrality, conservatism, consistency, reliability, and verifiability. However, if the FASB determines that implementation guidance is needed, then we believe that the best approach would be for the FASB to (1) develop broad conceptual guidance rather than detailed implementation guidance and (2) lead in developing and issuing such guidance by using a collaborative approach rather than by selecting a single organization. The collaborative approach that likely would be most successful in developing broad conceptual guidance would be forming a resource group of valuation professionals and other interested parties to assist the FASB, as discussed in paragraphs 16b and 18 of the Invitation to Comment. As an alternative, forming an organization structured similar to the FASB's Emerging Issues Task Force (EITF) that would include representatives from all interested parties, including FASB Board members, preparers, existing appraisal organizations, auditors, regulators, and investors, as discussed in paragraphs 16c and 19 of the Invitation to Comment, would be another useful approach.

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