Defining "Fair Value"

International Financial Reporting Standards: Companies can use historical costs or revalued amounts. The revalued value is the fair value less the cumulative depreciation and impairment losses subsequent to the revaluation date (Touche, 2009). GAAP in Canada and the United States uses historical costs as the measurement standard for tangible fixed assets (Touche, 2009). Revaluation is prohibited in both Canada and the US GAAP (Touche, 2009). So, what does this mean for companies that do not know what to choose and companies that need guidance? Even though certain IFRSs lack guidance, the accounting policies of IAS 8, changes in accounting estimates and application of errors require the implementation of guidance on fair value under other standards.

In September 2006, the FASB established a framework to measure fair value of generally accepted accounting principles by defining fair value and expanding fair value measurements SFAS No. 157 "Fair Value Measurement "(" WSAS 157 "). Disclosure. SFAS No. 157 is effective for financial statements issued during the fiscal year beginning after November 15, 2007 and interim periods during that fiscal year. Starbucks that allows early adoption will need to adopt these new requirements by the first quarter of 2009. I have not done Starbucks yet

FAS 157 came into effect in fiscal years after November 15, 2007. According to the summary: This statement defines fair value, establishes a framework for measuring fair value under generally accepted accounting principles (GAAP) and expands disclosure of fair value measurements . But there is no more. In short, FAS 157 caused a lot of pain. The entire process to achieve the fair value of non-current (Level 3) assets is far more difficult than obtaining the asset price of a listed stock. This is what Fred Wilson wrote in 2009: Valuation Blues (aka FAS 157 how it meandered). First of all, their process involves creating spreadsheets, searching for individuals and public comparisons, calculating revenues and multiples of EBITDA, quantifying traction, and obtaining baseline compensation. This applies to all portfolio companies.