Fair Value Option for Financial Instruments (ASC Topic 825) (Currently Unavailable)

Author: Pat Patterson

This session presents an option in generally accepted accounting principles, (GAAP), that allows an entity to elect fair value measurement for certain financial instruments and other items:

• What is a financial statement?
  
• Topic 825, Financial Instruments of the ASC provides the fair value option.
  
• What qualifications are there?
  
• The option is in the Fair Value Options Subsections of Subtopic 825-10.
  
• Explanations of the GAAP option.
  
• The when and how of election of the fair value option.
  
• Qualifying items for the fair value option.
  
• Disclosures required
  
• Objectives of an entity’s disclosures for fair value option.
  
• Changes specific to fair value option due to ASUs.

Publication Date: February 2020

Designed For
Professionals who might use or audit this option for financial reporting and investors who need to know the significance of the option.

Topics Covered

• How GAAP provides an option to measure certain items at fair value
• Define a financial instrument
• Which items qualify for the fair value option
• When and how an entity may elect the fair value option
• Objectives of an entity's disclosures about electing the fair value option
• Disclosure requirements
• Specific changes to the fair value option on account of recent Accounting Standard Updates

Learning Objectives

• Describe Fair Value
• Gain an overview of the GAAP for Fair Value Option in ASC Topic 825
• Identify areas of interest including; Qualifying items for the Fair Value Option, Disclosures required, and Discussion and definition of Financial Instruments
• Recognize examples of financial liability
• Describe disclosure requirements
• Recognize how GAAP provides an option to measure certain items at fair value
• Describe financial instruments
• Identify the objectives of an entity's disclosures about electing the fair value option
• Identify specific changes to the fair value option on account of recent Accounting Standard Updates

Level
Intermediate

Instructional Method
Self-Study

NASBA Field of Study
Accounting (2 hours)

Program Prerequisites
A general knowledge of GAAP and fair values.

Advance Preparation
None