On March 19, 2008, the Financial Accounting Standards Board (FASB or the Board) released Statement of Financial Accounting Standards No. 161, Disclosures about Derivative Instruments and Hedging Activities, an amendment of FASB Statement No. 133 (FAS 161, the Standard).
The auction rate securities market has been facing an unprecedented rate of auction failures due to liquidity concerns that have frozen the trading of auction rate preferred stock. Thus far, the trend shows no signs of reversing, which is adversely affecting the value of these securities. In order to alleviate the liquidity concerns, issuers have attempted to restructure their auction rate securities.