Handbook: Fair value measurement

Companies are facing a myriad of changes – including the rise of artificial intelligence, transition to a greener economy and new global taxes – as well as uncertainties about geopolitical events, inflation and interest rates. Any of these matters may require companies to reevaluate the judgments, inputs and critical assumptions underpinning their fair value measurements. Investors and regulators have been raising concerns about the clarity of financial reporting, including about measurement uncertainties. In times like this, it is critical that companies tell a clear story by providing transparent disclosures. This publication will help you apply the principles of ASC 820 and IFRS 13 Fair Value Measurement and understand the key differences between the accounting standards.

The Fair value measurement handbook includes a series of questions and answers on applying the Financial Accounting Standards Board (FASB) Accounting Standards Update (ASU) 2022-03 Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions. Among other things, the ASU clarifies that a contractual restriction on the sale of an equity security is an entity-specific characteristic and is not considered in measuring the security’s fair value.

This edition also links to information about FASB ASU 2023-08 Accounting for and Disclosure of Crypto Assets, which requires in-scope crypto assets to be measured at fair value with fair value changes recorded in current-period earnings. As part of this release, in-scope crypto assets will be subject to the disclosure requirements in ASC 820, Fair Value Measurement. The standard is effective for annual and interim periods in fiscal years beginning after 15 December 2024 with early adoption permitted. The International Accounting Standards Board does not have a similar project in its work plan.