Wiley GAAP 2019

52ASC 820 FAIR VALUE MEASUREMENTS

PERSPECTIVE AND ISSUES

Subtopic

ASC 820 contains one subtopic:

• ASC 820-10, Overall, which defines fair value, describes a framework for measuring fair value, and details required disclosures.

Scope and Scope Exceptions

ASC 820 does not require fair value measurements in addition to those required by other topics in the Codification.

Scope.

In pursuing an incremental approach, ASC 820 contains scope exceptions for certain, highly complex specialized applications. It does not apply to:

• Share-based payments transactions, except for transaction covered in ASC 718-40 which are within the scope of ASC 820
• Measurements that are similar to fair value but that are not intended to measure fair value, including:
  • Measurements models that are based on vendor-specific objective evidence¹ of fair value, such as multiple-deliverable arrangements and software revenue recognition
  • Inventory
• Accounting principles that address fair value measurements for purposes of lease classification or measurement. The exception does not apply to assets acquired and liabilities assumed in a business combination or an acquisition by a not-for-profit entity that are required to be measured at fair value regardless of whether those assets and liabilities are related to leases.²

• (ASC 820-10-15-2)

In addition to the scope exceptions listed above, ASC 820 retains the practicability exceptions included in GAAP that applies when, in management’s judgment, it is not practical ...