Fair value measurements.FASB's Statement of Financial Accounting Standards No. 15X changes current practice relating to the definition of 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., the methods used to estimate fair value and the requirement for expanded disclosures about estimates of fair value. [ILLUSTRATION OMITTED] Prior to this statement, there were different definitions of fair value and limited guidance for applying those definitions within GAAP, which created inconsistencies. Download the draft at www.fasb.org/project/fvm_working_draft_standard.pdf. |
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