Fair value is being used more and more in financial reporting. Its use ranges from measuring most financial instruments at fair value, to calculating impairments, and the recording of assets acquired and liabilities assumed in a business combination. Accounting standard setters continue to turn to fair value as a relevant measure of assets and liabilities for financial reporting purposes.
Both the FASB and the IASB have issued guidance In order to provide consistency related to fair value measurements. Overall, that guidance provides a framework for measuring assets and liabilities at fair value as well as requiring robust disclosures around the judgments and inputs behind the measurements. Application of the guidance can be complex and require significant judgment.
Impacts to companies:
What companies should do: