According to IAS 32, a financial instrument is a contract that gives rise to a financial asset of one entity and a financial liability or equity instrument of another entity. The global financial crisis has brought significant attention to the accounting model for financial instruments, both in the United States and around the world. The significant increase in the volumes of asset securitizations and derivative financial instrument transactions has served to draw attention to particular features of accounting standards. The harshest criticisms often concern the substantial use of fair value accounting for many financial instruments. With the introduction of International Financial Reporting Standards, users of financial statements are faced with a wide range of information about financial instruments, but it is becoming increasingly difficult to understand what is most important. This research focuses on the main causes of complexity in financial instrument reporting, how current measurement causes complexity, discusses ways in which it could be reduced in the medium term, and suggests how using a single measurement attribute, such as value fair, could reduce complexity. This research elaborates the long-term solution of measuring all financial instruments at fair value. An intermediate approach is needed to reduce the current complexity of IAS 39. Many interviewees commented on the complexity and noted that reducing complexity in accounting for financial instruments was one of the IASB's original objectives in replacing IAS 39. The FASB is Seeking feedback on reducing complexity in financial instrument reporting to simplify financial instrument measurement requirements while providing us with clearer and more complete information...... middle of paper ......enter and report profits and losses unrealized may result in: two identical instruments measured differently by the same entity, because • management's intentions to realize the value of an instrument may determine how it is measured. • management has the ability to value many financial instruments at fair value. • The way in which an instrument was acquired can influence its measurement (for example, the interest received by the originator in securitization transactions). • The percentage of total ownership interests that an investor holds in an investee influences how the investment is accounted for. two identical instruments are measured differently by entities in different industries. Under US GAAP, specialized measurement practices apply to broker-dealers, investment companies, pension plans, mortgage lenders, insurance companies, and others.