FASB issues proposal on fair value measurements.Responding to increasing calls for better guidance on measuring fair value Fair Value 1. The estimated value of all assets and liabilities of an acquired company used to consolidate the financial statements of both companies.2. In the futures market, fair value is the equilibrium price for a futures contract. This is equal to the spot price after taking into account compounded interest (and dividends lost because the investor owns the futures contract rather than the physical stocks) over a certain period of time., FASB has published an exposure draft, Fair Value Measurements, that establishes a framework for measuring fair value that applies to financial and nonfinancial assets Nonfinancial assets Physical assets such as real estate and machinery. and liabilities. The framework would clarify the fair value measurement objective and its application under other authoritative pronouncements that require fair value measurements, as well as expand disclosures about the use of fair value to measure assets and liabilities. The comment period for the draft ends Sept. 7. For more, visit www.fasb.org/draft/index.shtml. |
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