This presentation covers the Generally Accepted Accounting Principles (GAAP)framework for measuring an item at its fair value, as set out in Financial Accounting Standards Board (FASB) Topic 820, Fair Value Measurement. The presentation discusses the concept of fair value, valuation approaches, related inputs on which fair value measurement may be based and prioritizes inputs into a hierarchy based on their strengths. As GAAP, the presentation distinguishes between valuation and measurement. The act of making judgments about the value of an item is valuation and is an activity broader than financial reporting. The act of assigning a single value to an item for financial reporting purposes is measurement and involves valuation but ultimately requires the selection of a single amount to be recognized. Also covered are the improvements to the Codification found in ASU 2019-04, Codification Improvements to Topic 326, Financial Instruments—Credit Losses, Topic 815, Derivatives and Hedging, and Topic 825, Financial Instruments, April 2019.
Publication Date: January 2021
Designed For
Certified Public Accountants and other accounting professionals Involved with fair value measurements. This includes professionals in public practice, business, government, education, and other areas of interest.
Topics Covered
- Background
- The Fair Value Concept
- Valuation Approaches and Related Inputs
- Hierarchy
- Measuring Certain Items
- Disclosures
- ASU 2018”03: August, 2018
- ASU 2019”04: April, 2019
- What about COVID”19? Or in other words, "what is Fair Value in times of uncertainty?"
Learning Objectives
- Identify the objectives of GAAP's fair value measurement framework
- Recognize how to explain the concept of fair value and cite associated definitions
- List major categories of valuation approaches and related inputs
- Recognize how to explain the hierarchy of inputs to fair value measurements
- Identify the basic disclosures required by ASC 820
- Recognize which approach includes an analysis of matrix pricing
- Differentiate the level inputs of fair value measurements
Level
Intermediate
Instructional Method
Self-Study
NASBA Field of Study
Accounting (2 hours)
Program Prerequisites
A general understanding of Fair Value Accounting.
Advance Preparation
None
Instructor
Pat Patterson
Cecil Patterson, (Pat), CPA, MBA, is an award-winning, nationally recognized author, speaker, and discussion leader for continuing education courses and numerous state societies. He has experience at the local and national CPA-firm level and as an adjunct university professor.
Pat holds an MBA from the University of North Florida and is a CPA and owner of the firm of Cecil Patterson, CPA. His firm provides, accounting, tax preparation and tax planning services, wealth management services, and consulting for businesses and other professional firms.
Pat has served on the AICPA Council, the FICPA Council, and the FICPA Educational Foundation Board of Trustees.