CPA Financial Executives Evaluate Fair Value Accounting

Recognition of fair values in the financial statements is required for a wide range of assets and liabilities, and recent changes in accounting standards have established a framework for measuring fair values and expanded disclosures about fair value measurements. Fair value accounting has been controversial because it necessitated recognition of significant income statement losses during the recent credit crisis, sometimes for assets that were difficult to fair value. Some commentators have argued that by forcing recognition of large losses, fair value accounting might have shaken confidence in the credit markets and exacerbated the crisis.