How is it disclosed?

As noted in the two previous posts, FAS 157 “expands disclosures [emphasis added] about fair value measurements.” In this post we describe how fair value information for environmental liabilities is disclosed under FAS 157?

Under FAS 157, a company makes such disclosure in financial statements for each annual and interim period after initial recognition. So, a company discloses fair value information about its environmental liabilities annually in its 10-K, quarterly in its 10-Q, and as needed in 8-K filings with the SEC.

The information required is the same in annual and interim reporting, with one exception. The previous day’s post on “What must be disclosed?” describes what's required. The exception is the identification of valuation techniques for the fair value measurements, which is necessary only in the annual report.

FAS 157 requires that all fair value quantitative information be presented in table format. As shown by example in paragraph A34 of FAS 157, FASB suggests that major categories (of assets or liabilities) be listed down in rows, with total amounts and amounts for each fair value hierarchy level shown in column entries. A company might display a single table with fair value information for its environmental liabilities.

In FAS 157, FASB encourages, but does not require, a company to present its fair value information combined, i.e., in one area of its financial statement. This would be all the fair value information, not just that for environmental liabilities. It would include fair value information from other pronouncements, in addition to FAS 157.

In the two previous posts, we described what must be disclosed and when disclosure is required under FAS 157.