A statement posted on the FASB Web site said the project’s goal is to decide whether GICs and synthetic GICs, held by certain mutual funds should be reported at fair value or contract value. FASB staff plans to provide a revised position document and an analysis of public comment letters at FASB’s November 29, 2005 Board meeting. The already released proposed FASB Staff position on the GIC issue is here.
The public letters can be viewed here .
The guidance in the proposed FSP will be effective for financial statements for annual periods ending after December 15, 2005, the FASB Web document said.
According to FASB, the investment companies holding the
GICs are primarily associated with stable value funds,
which are primarily offered by defined contribution plans
and provide plan participants with the ability to transact
in the fund at book, or “contract,” value regardless of
changes in the fair value of underlying securities invested
in the fund.