Fair Value Option for Financial Instruments (Currently Unavailable)

Author: Pat Patterson

This presentation 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. The session will cover definitions of financial instruments and an explanation of the GAAP option. Qualifying items, disclosures, and the objectives for the fair value option will be dealt with. Specific changes to the fair value option on account of recent Accounting Standard Updates including ASU 2020-03.

Publication Date: February 2021

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

• 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 including ASU 2020-03

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