Fair value measurement

Fair value accounting continues to be a topic of significant interest and debate. With unprecedented market events, turmoil in the credit markets, and a downturn in the global economy in recent years, discussion of fair value has intensified. This discussion made clear the need for consistent fair value measurements in a global market. To that end, the fair value guidance is a principles-based global framework that, with few exceptions, impacts all fair value measurements in a reporting entity’s financial statements.


In brief

GASB issues fair value measurement standard

3/2/15 | Assurance services

Accounting guides

Global Guide to Accounting for Fair Value Measurements - ASC 820

8/23/13 | Assurance services
  • Financial instruments


    The FASB and IASB did not converge on financial instruments. The FASB has substantially completed deliberations on its financial instruments - classification and measurement project and has issued an exposure draft of proposed disclosures for hybrid financial instruments with bifurcated embedded derivatives. The IASB issued IFRS 9 Financial Instruments which replaces most of the guidance in IAS 39 and includes a new model for classification and measurement of financial assets and impairment.

  • In brief
    In brief: GASB issues fair value measurement standard

    3/2/15 | Assurance services

    GASB's newly released Statement No. 72 prescribes how governments should define and measure fair value.

  • In depth
    In depth: Classification and measurement of financial instruments – What to expect

    2/26/15 | Assurance services

    PwC's summary of the FASB's completed deliberations on its classification and measurement project and its implications.

  • PwC comment letter (IASB)
    PwC comments on proposals for measuring quoted investments at fair value

    2/3/15 | Global accounting consulting services

    PwC agrees that the unit of account should be the investment as a whole.

  • In depth
    In depth: Collateralized financing entities - FASB provides new measurement alternative

    12/19/14 | Assurance services

    FASB provided new measurement alternative to reduce earnings volatility from the consolidation of securitized vehicles.

  • Accounting guides
    Financial statement presentation - 2014 accounting and financial reporting guide

    10/30/14 | Assurance services

    The inaugural edition of our "Financial statement presentation" accounting and financial reporting guide addresses U.S. GAAP presentation and disclosure requirements of common balance sheet and income statement accounts.

  • In brief
    In brief: PCAOB staff seeks comment on auditing estimates and fair value

    8/22/14 | Assurance services

    PCAOB staff is evaluating whether it can improve auditing standards for estimates and fair value.

  • Global valuation standards: achievable?

    3/4/14 | Assurance services

    PwC Global valuations leader John Glynn and director Caroline Woodward explain how global valuation standards are worth pursuing, regardless of the obstacles likely to be encountered en route. And with a new chairman in place at the IVSC, the time could be right.

  • Dataline
    Dataline: Highlights of the 2013 AICPA National Conference on Banks and Savings Institutions

    12/12/13 | Assurance services

    At the 2013 AICPA National Conference on Banks and Savings Institutions, regulators and standard setters shared views on top-of-mind issues for financial institutions.

  • Dataline
    Dataline: Derivative valuation: The transition to OIS discounting

    12/10/13 | Assurance services

    Derivative pricing practices have evolved in recent years to reflect the funding benefit of collateral when that collateral can be rehypothecated. In fact, some collateralized derivatives may now need to be valued based on discounting at the Overnight Indexed Swap (“OIS”) rate.

  • Dataline
    Dataline: Testing Goodwill for Impairment - AICPA issues Accounting and Valuation Guide

    11/25/13 | Assurance services

    Issues continue to arise in connection with goodwill impairment testing. A new AICPA guide provides guidance and illustrations related to goodwill impairment testing.

  • Point of view
    Point of view: Global valuation standards - Charting a course for the future

    9/25/13 | Assurance services

    In our view, a leading global valuation standard setter can enhance quality, promote consistency in practice, and advance the brand of the valuation profession.

  • Point of view
    Point of view: The valuation profession - At a crossroads

    9/25/13 | Assurance services

    In our view, the time has come for the valuation profession to explore creating a robust professional infrastructure for those that perform valuations.

  • Accounting guides
    Global Guide to Accounting for Fair Value Measurements - 2013 edition

    8/23/13 | Assurance services

    This PwC guide helps reporting entities meet the challenges of applying the key accounting and reporting standards under both U.S. GAAP and IFRS related to fair value measurements, ASC 820, and IFRS 13.

  • Dataline
    Dataline: Valuation of Privately-Held-Company Equity Securities Issued as Compensation -- AICPA issues updated Accounting and Valuation Guide

    7/25/13 | Assurance services

    On May 29, 2013, the AICPA's Financial Reporting Executive Committee issued the AICPA Accounting and Valuation Guide, Valuation of Privately-Held-Company Equity Securities Issued as Compensation (the Guide), which replaces the 2004 edition of the practice aid on this topic. The Guide (also known as the Cheap Stock Guide) provides nonauthoritative valuation guidance and illustrations for preparers, auditors, and valuation specialists related to the issuance of privately-held company equity securities for compensation. This Dataline provides a high level overview of the Guide.

  • EITF observer
    EITF observer: A meeting synopsis - June 2013

    6/14/13 | Assurance services

    The EITF met on June 11, 2013 to discuss six issues. PwC's EITF observer provides you an insightful summary of decisions reached and the changes affecting US GAAP.

  • PwC comment letter (FASB)
    PwC comments on deferral of the effective date of certain fair value disclosures for employee benefit plans

    5/30/13 | Assurance services

    PwC agrees with the proposal to defer certain of the fair value disclosures for nonpublic employee benefit plans and supports the inclusion of the new glossary term.

  • Tax accounting insights
    Tax considerations relating to fair value accounting

    3/25/13 | Tax accounting services

    PwC has refreshed our 'Fair Value Accounting: Tax Considerations' publication (originally released in December 2008).

  • Dataline
    Dataline: Financial instruments classification and measurement - An update on the FASB's tentative approach to be exposed in Q1 2013

    12/7/12 | Assurance services

    Classification and measurement is an important part of the FASB and IASB’s joint project on financial instruments. This Dataline provides a summary of the boards' decisions that is based on the project summaries posted on their websites, our observations of their meetings, and our understanding of their intent.

  • Dataline
    Dataline: 2012 year-end accounting and reporting considerations - Leading practices and lessons learned on key topics

    12/3/12 | Assurance services

    This year end, entities continue to face many complex financial reporting issues such as providing new fair value disclosures, accounting for debt modifications, and evaluating revenue recognition guidance. Economic challenges around the world continue to have broad financial reporting implications. While not an all-inclusive list, this Dataline is intended to serve as a timely reminder of leading practices and lessons learned on key issues that companies should consider as they navigate the year-end financial reporting process.

  • Dataline
    Dataline: Highlights of the 2012 AICPA National Conference on Banks and Savings Institutions

    10/18/12 | Assurance services

    The 2012 AICPA National Conference on Banks and Savings Institutions was held September 10 through 12, 2012 in Washington, DC. Representatives from the banking regulators, SEC, and standard setters presented at the Conference along with auditors, users, preparers, and industry experts. Presenters expressed views on a wide range of important accounting, auditing, and financial reporting topics. This Dataline provides highlights of topics discussed at the Conference.

  • Dataline
    Dataline: New fair value measurement standard -- Adoption of the new guidance: First quarter 2012 measurement and disclosure observations

    6/14/12 | Assurance services

    This PwC Dataline provides observations on how new fair value guidance was implemented in the first quarter by a sample of 37 companies from a variety of industries. It identifies leading practices and points of interest to assist reporting entities as they develop their future fair value disclosures. The companies we sampled are from a variety of industries, including (1) financial services - banking and capital markets, asset management, and insurance, and (2) other industries - utilities, energy, manufacturing, and real estate.

  • Dataline
    Dataline: New fair value measurement standard -- Implementation guidance for new disclosure requirements

    2/27/12 | Assurance services

    In May 2011, the FASB issued Accounting Standards Update No. 2011-04, Fair Value Measurement (Topic 820): Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRSs (the ASU). The ASU resulted from a joint project with the International Accounting Standards Board (IASB). The IASB also issued IFRS 13, Fair Value Measurement, in May 2011. Many of the changes to existing fair value measurement guidance represent clarifications and are intended to align U.S. GAAP and IFRS. However, certain of the amendments to U.S. GAAP are substantive and several new disclosures are required. This Dataline includes a series of questions and answers providing implementation guidance on selected new disclosure...

  • M&A snapshot
    Market participants - how their views impact your values (M&A snapshot)

    9/26/11 | Assurance services

    In a business combination, buyers are required to record the acquired assets and assumed liabilities of a business at their fair values. Fair value reflects the price that market participants would receive to sell an asset or pay to transfer a liability. Assets and liabilities may be used differently by different market participants, resulting in variations in values. Therefore, a market participant's view is an important aspect of the valuation process as a buyer cannot look only to its own intended use of an asset or its ability to transfer a liability at a certain price. This publication provides insight on the identification of market participants, as well as how entities can develop market participant assumptions.