The global financial crisis underscored the profound challenges in financial instrument accounting, prompting the two leading accounting standards boards to get together in 2008 to address these issues and search for simplicity and consistency. However, they have been moving in separate directions. Now research conducted by PwC has provided another forum for a cross-section of a key stakeholder group – the investors and analysts – to add to this critical debate.
The Financial Accounting Standards Board (FASB) proposes that all financial instruments are reported at fair value, including bank loans and deposits; the International Accounting Standards Board (IASB) seeks to retain some of the existing financial instruments accounting model that uses a combination of fair value and amortised cost, depending on the nature of the financial instrument.
PwC surveyed a geographically diverse sample of investors and analysts to gain a better understanding of their perspectives on accounting and reporting for financial instruments. The findings offer insight into the use of financial instrument information in their analytical processes. The goal was not to establish definitive conclusions, but to capture and present views held by a variety of investment professionals.