8.The approach is relatively simple. It does not involve complex and highly judgmental assessments of net risk exposures or correlation. Most of the fair value measurements currently are computed for compliance with Statement 107. 9.Some reduction in the volume of disclosure in the notes to the financial statements may be possible for an enterprise that elects to mark all financial instruments to market. Those individuals consider that once the change in value has occurred, no other subsequent transaction or event is more relevant.
Concern also arises because of the opportunity to gains trade in the income statement.
However, issues about both the relevance of realization and the opportunities for gains trading exist in a model that accounts for those instruments based on historical cost. 2.Nonfinancial exposures are not accommodated. It is true that basis adjustment will no longer be provided to hedged commodity and other nonfinancialexposures. Nor will an enterprise have the opportunity to mark those exposures to market. However, depending on the model elected, concurrent earnings recognition is achievable if an enterprise designs its derivatives or cash instruments so that they are realized or realizable in the period desired.