Fair Value Changes Ahead

Linda A. MacDonald, CPA

The use of fair value in financial reporting is not new; it is required or permitted under many standards, some of which have been in place for decades. Yet, given its role in the asset write-downs and market volatility precipitated by the financial crisis, there has been considerable discussion and debate about the use of fair value in financial reporting. As the financial crisis has broadened, the debate has evolved into a global one involving not only FASB and its international counterpart, the international Accounting Standards Board (iASB), but also securities regulators, banking regulators, governmental bodies, and other participants in the global capital markets. Responses to the financial crisis have focused on fair value accounting and have led to changes in the standards that will affect financial reporting going forward.