FASB's Fair Value Update; New disclosure requirements aim to provide more transparency in alternative investment funds' financial statements.(From The Field)(Financial Accounting Standards Board)

Byline: Tom Del Core and John Barbagallo

Investors spoke and the Financial Accounting Standards Board listened. Just when financial statement preparers in the alternative investment fund industry were getting accustomed to the new requirements for fair-value disclosure, FASB expanded those requirements by issuing Accounting Standards Update (ASU) No. 2010-06: Improving Disclosures About Fair Value Measurements.

While at first glance it may seem that the new and improved disclosure requirements are excessive, this update provides some very useful information that will benefit investors and other users of the financial statements. This enhanced transparency will help to restore investor confidence and could promote increased asset flows to the alternative investment space.

The update was issued in January 2010 to provide new and improved disclosure requirements and to increase transparency for entities that are required to disclose …