Accountants' Handbook, Volume Two, Special Industries and Special Topics, 12th Edition

Chapter 24

Fair Value Measurement

This chapter is adapted from Mark L. Zyla, Fair Value Measurements: Practical Guidance and Implementation, 2nd ed. (Hoboken, NJ: John Wiley & Sons, forthcoming), and is used with permission.

Mark L. Zyla, CPA/ABV, CFA, ASA

Acuitas, Inc.

24.1 Introduction

24.2 Why the Trend Toward Fair Value Accounting?

(a) The Changing Economy

(b) Globalization

(c) Relevance and Transparency

24.3 History and Evolution of Fair Value

(a) Development of Fair Value Concepts

(b) Fair Value of Financial Instruments

(c) Fair Value Measurement for Nonfinancial Assets and Liabilities

(d) Fair Value Measurement and the Economic Crisis

(i) Mark-to-Market Accounting

(ii) Application of Fair Value Accounting in Illiquid Market

(iii) SEC Study on Mark-to-Market Accounting

(iv) The FASB's Credit Crisis Projects

(e) Convergence of Fair Value Measurement

(f) Future of Fair Value Measurement

24.4 Fair Value Measurements Standards and Concepts

(a) FASB ASC 820, Fair Value Measurements and Disclosures

(b) Definition of Fair Value Measurements and Disclosures

(c) Topic ASC 820, Scope and Scope Exceptions

(d) Initial Measurement

(e) Fair Value Framework

(i) Asset or Liability

(ii) Transaction

(iii) Principal (or Most Advantageous) Market

(iv) Market Participants

(v) Price

(vi) Highest and Best Use for Nonfinancial Assets

(vii) Application to Liabilities and Instruments Classified in a Reporting Entity's Shareholders' Equity

(viii) Liabilities and Instruments Classified in a Reporting ...