FASB Issues Clarifying Guidance on Determining Fair Value

The US Financial Accounting Standards Board (FASB) has issued guidance clarifying how FASB Statement No. 157, Fair Value Measurements (FAS 157), should be applied when valuing securities in markets that are not active. The guidance, released as a FASB Staff Position, provides an illustrative example that applies the objectives and framework of FAS 157 to determine the fair value of a financial asset in a market that is not active. It also reaffirms the notion of fair value as an exit price as of the measurement date. (Read more in PricewaterhouseCoopers Breaking News on significant accounting, auditing and regulatory matters.)