【正文】 s all freestanding derivatives be recognized at fair value. However, SFAS No. 133 retains elements of the existing hedge accounting model. In particular, fair value changes in those derivatives employed for purposes of hedging fair value risks (., interest rate risk and modity price risk) are shown as a ponent of ine, as are the changes in fair value of the hedged balance sheet item (., fixed rate loans and inventories) or firmmitments (., forward contracts). If the socalled fair value hedge is perfect, the effect on ine of the hedging relationship is zero. In contrast, fair value changes in those derivatives employed for purposes of hedging cash flow risks (., cash flows volatility resulting from interest rate risk and modity price risk) are shown as a ponent of accumulated other prehensive ine because there is no recognized offsetting change in fair value of an implicitly hedged balance sheet item or anticipated transaction. Outside of the US, standards issued by the IASB are often accepted or required as generally accepted accounting principles (GAAP) in many countries. For example, the European Union generally requires member country firms to issue financial statements prepared in accordance with IASB GAAP beginning in 2020. IASB GAAP prises standards issued by its predecessor body, the International Accounti ng Standards Committee (IASC), as well as those it has issued since its inception in 2020. The IASC issued two key fair value standards, both of which have been adopted by the IASB, IAS 32: Financial Instruments: Disclosure and Presentation (IASB, 2020), IAS 39, Financial Instruments: Recognition and Measurement (IASB, 2020). The former standard is primarily a disclosure standard, and is similar to its US GAAP counterparts, SFAS Nos. 107 and 119. IAS 39 describes how particular financial assets and liabilities are measured (., amortized cost or fair value), and how changes in their values are recognized in the financial statements. The scope of IAS 39 roughly enpasses accounting for investment securities and derivatives, which are covered under SFAS Nos. 115 and 133, although there are some minor differences between IAS and US GAAP. The IASB has also issued a key fair value standard, International Financial Reporting Standard 2, Accounting for Sharebased Payment (IASB, 2020). IFRS 2 is very similar to SFAS No. 123 (Revised) (FASB, 2020) in requiring firms to recognize the cost of employee stock option grants using grant date fair value. As part of their efforts to harmonize US and international accounting standards, the IASB and FASB recently issued related proposed or finished standards pertaining to disclosure of financial instruments fair values, Exposure Draft: Fair Value Measurements (FASB, 2020a) and International Financial Reporting Standard 7, Financial Instruments: Disclosures (IASB, 2020). The US Exposure Draft describes a hierarchy of preferred approaches to fair value measurement for all assets and liabilities measured at fair value under other FASB pronouncements, ranging from quoted market prices for the specific asset or liability to use of models to estimate fair values. Both the Exposure Draft and IFRS 7 require disclosure of fair value amounts at the end of each accounting period (year, quarter), how the fair values are determined, and the effect on ine arising from each particular class of assets or liabilities (., separate disclosure of recognized and unrecognized gains and losses). IFRS 7 is more prehensive than the Exposure Draft in that it requires disclosure of detailed information for recognized financial instruments, both those measured at fair value and those that are not, as well as qualitative information relating to financial instruments’ liquidity, credit, and market risks. Valuation Techniques As noted above, in its Exposure Draft: Fair Value Measurements, the FASB describes a hierarchy of preferences for measurement of fair value. The pref