The Financial Accounting Standards Board (FASB) has issued Statement of Financial Accounting Standards No. 157, Fair Value Measurements, providing enhanced guidance for using fair value to measure assets and liabilities. More than 40 current accounting standards within generally accepted accounting principles (GAAP) require or permit entities to measure assets and liabilities at fair value. Prior to last week’s issuing of this standard, the methods for measuring fair value were diverse and inconsistent.
“Today’s [sic] Statement establishes a market-based framework for measuring assets and liabilities at fair value if a particular accounting standard calls for it,” Leslie F. Seidman, FASB member, said in a statement announcing the issuing of the Statement. “Moreover, by requiring companies to provide expanded information about the assets and liabilities measured at fair value, investors and other financial statement users will be able to make more informed decisions about the potential effect of those measurements on a entity’s financial performance.”
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