IAS 39 vs FAS 159

versus

Must meet criteria so that financial reporting is improved by fair value measurementPrecludes similar items

as listed in FAS159 (leases, pensions, etc.)

Determination is made at initial recognition and cannot be changed

Instrument by instrument decisionApplies only to items

within scope of FAS159

Determination is made at initial recognition and cannot be changed

IAS 39 vs FAS 114, 118, etc.

versus

Carried at amortized cost (using the effective interest method) minus any reduction (directly or through the use of an allowance account) for impairment or uncollectibility.

Carried at amortized cost (using the effective interest method)

An allowance for uncollectible amounts makes the carrying value = net realizable value

The amount of the loss is measured as the difference between the asset’s carrying amount and the present value of estimated future cash flows discounted at the financial asset’s original effective interest rate.

The impairment is measured based on the present value of expected future cash flows at the loan’s (original) effective interest ratePractical expedients are

permitted Observable market price Value of collateral