Ideal for self-study or on-site training
Whether you are in industry or public practice, this course keeps you current and informed and shows you how to apply the most recent standards.
Objectives: Apply the recently issued FASB Statements and Interpretations, AICPA Statements of Position, Statements on Auditing Standards, Statements on Standards for Accounting and Review Services and Statements on Standards for Attestation Engagements to accounting and auditing problemsPrerequisite: Experience in accounting and auditing.
Value Aid! Numerous examples, illustrations and the AICPA’s Audit Risk Alert The Video Moderator is Mary S. Stone, Ph.D., CPA, Hugh Culverhouse Professor and Director of the Culverhouse School of Accountancy at the University of Alabama. Appearing on the video are Suzanne Q. Bielstein, CPA, Director of Major Projects and Technical Activities at the Financial Accounting Standards Board; Lillian Ceynowa, Director of Professional Practice and Member Relations at the Center for Audit Quality; Michael Glynn, AICPA Technical Manager, Audit and Attest Standards team; Ahava Goldman, AICPA Technical Manager, Audit and Attest Standards team; Jay D. Hanson, CPA, Partner and National Director of Accounting at McGladrey & Pullen, LLP; and Hiram Hasty, AICPA Technical Manager, Audit and Attest Standards team.
*(195-min. video) The DVD disk contains the video presentation and a viewable copy of the Manual. **The Additional Manual is for group study training only. Unlike other formats, it has no exam answer sheet and cannot be used to earn self-study credit.
Chapter 1
Fair Value Measurements: Current Status and Future Plans
Learning Objectives
Upon completing this chapter, you should be able to
Introduction
Most new FASB Statements and Interpretations require recognition of certain assets and liabilities at fair value. A quick review of new standards reveals the following:
| Exhibit 1-1 Recent Standards Requiring Recognition and Measurement at Fair Value | ||
| Standard Number and Title | Recognition | Measurement |
| SFAS No. 142, Goodwill and Intangible Assets | a. Acquired intangible assets. b. Impaired goodwill |
a. Fair value. b. Fair value. |
| SFAS No. 143, Accounting for Asset Retirement Obligations | Asset retirement obligations. | Fair value. |
| SFAS No. 144, Accounting for the Impairment or Disposal of Long-Lived Assets | Impaired assets. | Fair value. |
| SFAS No. 146, Accounting for Costs Associated with Exit or Disposal Activities | Certain costs and liabilities associated with exit and disposal activities. | Fair Value. |
| SFAS No. 150, Accounting for Certain Financial Instruments with Characteristics of Both Liabilities and Equity | a. Redeemable financial
instruments. b. Certain obligations to issue a variable number of shares. |
a. Fair value. b. Fair value. |
| FASB Interpretation No. 45, Guarantor’s Accounting and Disclosure for Guarantees, Including Indirect Guarantees of Others | For certain guarantees, the guarantor’s obligation to stand ready. | Fair value. |
| FASB Interpretation 46 (revised December 2003), Consolidation of Variable Interest Entities | Recognize newly consolidated assets, liabilities and noncontrolling interest of a VIE1. | Fair value. |
| SFAS No. 123 (revised 2004), Share-Based Payment | a. Recognize certain share-based
payment awards as liabilities. b. Recognize certain share-based payment awards as equity. |
a. Fair value. b. Fair value. |
| SFAS 153, Exchanges of Nonmonetary Assets, an amendment of APB Opinion No. 29 | Asset received in a nonmonetary exchange that has commercial substance. | Fair value. |
The above Statements require the recognition at fair value of an asset, a liability, or an owners’ equity amount. Thus, fair value measurements are more frequently being required for balance sheet accounts.
Because of the emphasis placed on fair value by the FASB, this chapter includes a discussion of that topic by reviewing the FASB literature related to fair value measurements. The FASB has stated its objective that all financial instruments should be measured at fair value in financial statements and has issued several documents that enable accountants to better understand its views and the conceptual issues related to measuring accounting amounts at fair value or estimates thereof.
Although those documents do not establish GAAP and the FASB has not decided when, if ever, to implement its objective by issuing FASB Statements requiring fair value measurement for financial instruments, its objective has been implemented on a case by case basis as evidenced in Exhibit 1-1.
Although fair value measurement is a current topic in the financial instruments area, fair value measurements, and estimates thereof, are used in the accounting for assets, liabilities, and equity interests that are not financial instruments. SFAC No. 7 provides conceptual guidance related to using cash flow information and present value techniques in the measurement of fair value of both financial instruments and nonfinancial assets, liabilities, and equities.
Pre-Chapter Quiz
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