Interactive Data Corporation (NYSE: IDC), a leading provider of financial market data, analytics and related services, today announced that its Pricing and Reference Data business has developed a set of informational resources designed to help clients prepare for the Financial Accounting Standards Board’s Statement of Financial Accounting Standards No. 157 (“FAS 157”).
FAS 157 will be mandatory for financial statements prepared in accordance with Generally Accepted Accounting Principles (GAAP) for fiscal years beginning after November 15, 2007. In order to comply with FAS 157, firms will need to understand the Financial Accounting Standards Board’s definition of fair value, develop procedures for fair value disclosures in their financial statements, and review their existing valuation policies and procedures. Additional information about FAS 157 is available on the Financial Accounting Standards Board’s website
Firms that are subject to FAS 157 often make fair value determinations based on inputs received from third parties, including pricing/evaluation providers such as Interactive Data Pricing and Reference Data. Since FAS 157 was issued in September 2006, Interactive Data Pricing and Reference Data has been discussing the statement with its clients and independent accounting firms and has been developing informational resources for clients to assist them with their preparations for FAS 157.
The focus of this preparation has been helping clients to understand the inputs that Interactive Data Pricing and Reference Data utilizes in its evaluation services. Interactive Data Pricing and Reference Data conducted an internal project to review and specify the inputs for each subset of evaluations it prepares. This enhanced transparency should provide clients with sufficient information to make their own fair value hierarchy determinations as required under FAS 157.
“By taking a ‘bucketed approach’ of disclosing the types of inputs by asset class that we utilize to prepare evaluations, we can provide clients with critical information they need to comply with FAS 157,” said Liz Abela-Davi, senior director, global fixed income evaluations, Interactive Data Pricing and Reference Data. “We will continue to work closely with our clients and gather feedback about how we are disclosing our inputs, and we expect that our documentation will evolve based on client needs and new market developments.”
“Interactive Data believes that it is critical to work closely with clients and other firms in the financial services industry to better understand new regulations and standards, and the impact that they may have,” said Ray D’Arcy, president of sales and marketing, Interactive Data Corporation. “By providing a comprehensive set of informational resources that offer increased transparency into our evaluations process, we believe that we can help our clients effectively prepare for FAS 157.”