Call us 24/7: + 1(925)399 0085

Get your paper done by an expert

No matter what kind of academic paper you need, it is simple and secure to hire an essay writer for a price you can afford at StudyAcer. Save more time for yourself.

WhatsApp + 1(925)399 0085
$ 10
  • bibliography
  • title page
  • revisions
per page
19 k happy customers
4.7 out of 5 satisfaction rate
27 writers active

Financial Management Essay

Statement of Financial Accounting Standards (SFAS) No. 157 defines what is fair value as understood in terms of generally accepted accounting principles (GAAP), and it also increases disclosure requirement about fair value measurements. This latest Statement, effective this 2007 is being made applicable to other accounting pronouncements made earlier where there is a requirement or allowance for use fair value measurements of an accounting entities’ assets, liabilities and equity accounts. (Bernstein, 1993; Brigham and Houston, 2002).

SFAS 157 therefore does not require any new fair value measurements on the basis of the Financial Accounting Standards Board having earlier determined that that fair value is the relevant measurement attribute (FASB, n. d. ). As to why the FASB needed to issue this SFAS, it may be recalled that before this Statement, the Accounting profession has already been exposed to different definitions of fair value but only had limited guidance for applying those definitions in GAAP (Meigs and Meigs, 1995).

This is not to mention the fact that that guidance to accountants was found in many accounting pronouncements that require fair value measurements, thereby generating differences that strong enough to create possible inconsistencies of these guidelines hence may be held contrary into the FASB objective of applying GAA less complex. Increased consistency and comparability in fair value measurements and for expanded disclosures about fair value measurements appears to be the clear objective of FASB in enacting this SFAS 157 (FASB, n. d. ).

As to how this differs from other fair value pronouncements, the argued may be framed on the following points: First, since the changes to current practice resulting from the application of this Statement relate to the definition of fair value, the methods used to measure fair value, and the expanded disclosures about fair value measurements, the differences should only be expected to arise on said points.

Specifically, the present definition of fair value under SFAS 157 preserves the exchange price notion in earlier definitions of fair value. SFAS 157 however now makes the clarification that “the exchange price is the price in an orderly transaction between market participants to sell the asset or transfer the liability in the market in which the reporting entity would transact for the asset or liability, that is, the principal or most advantageous market for the asset or liability. ” (FASB, 2007, n. d. ).

The new statement treats the transaction to sell the asset or transfer the liability as a hypothetical transaction at the measurement date, considered from the perspective of a market participant that holds the asset or owes the liability. It is therefore clear to see focus of the definition made on the price that would be received to sell the asset or paid to transfer the liability (FASB, 2007, n. d. ). Such definition of price is of course different and should be distinguished on the price that would be paid to acquire the asset or received to assume the liability.

It needs to be emphasized also that SFAS treats fair value as a market-based measurement, not an entity-specific measurement, hence measurement is determined based on the assumptions that market participants would use in pricing the asset or liability (FASB, 2007, n. d. ). 3. Select one public company in the last 3 years that has had asset impairments and have a one page explanation of what the impairment was about and under what standard it was calculated. The company is selected is Standard Register.

Using its 2006 Annual Report, the company (Standard Register 2007b) has indeed asset impairment Net Assets Held for Sale based on its notes to FS which provides: “In conjunction with the closing of the Terre Haute plant, in 2006 the Company recorded $1,474 of asset impairments, primarily related to equipment.

The carrying value of the Terre Haute building and equipment was adjusted to its fair value less costs to sell, considering recent sales of similar properties and real estate valuations” This paper submits that the impairment may have been calculated under SFAS No. 154, made effective on January 2, 2006, on Accounting Changes and Error Corrections which is a replacement of APB Opinion No. 20 and Financial Accounting Standards Board (FASB) Statement No. 3. (Standard Register 2007a) 4. Submit the title page of SFAS 157 from the FASB or FARS site. See Next Page. 5. Submit a copy of the page of the company 10-K that indicates the impairment Bernstein, Financial Statement Analysis, IRWIN, Sydney, Australia, (1993) Brigham and Houston, Fundamentals of Financial Management, Thomson South-Western, US, 2002

FASB, Summary of Statement No. 157 Fair Value Measurements, (n. d. ) http://www. fasb. org/st/summary/stsum157. shtml, {www document} URL, Accessed October 7, 2007 Meigs and Meigs, Financial Accounting, McGraw-Hill, New York, USA, 1995 Standard Register, 2006 Annual Report, Form 10 – K, (2007a) {www document} URL http://media. corporate-ir. net/media_files/irol/95/95849/2006annualreport2. pdf, Accessed October 7, 2007 Standard Register, Company Website, (2007b) {www document} URL, http://www. standardregister. com/, Accessed October 7, 2007

Our guarantees

Study Acers provides students with tutoring and help them save time, and excel in their courses. Students LOVE us!No matter what kind of essay paper you need, it is simple and secure to hire an essay writer for a price you can afford at StudyAcers. Save more time for yourself. Delivering a high-quality product at a reasonable price is not enough anymore.
That’s why we have developed 5 beneficial guarantees that will make your experience with our service enjoyable, easy, and safe.

Money-back guarantee

You have to be 100% sure of the quality of your product to give a money-back guarantee. This describes us perfectly. Make sure that this guarantee is totally transparent.

Read more

Zero-plagiarism guarantee

Each paper is composed from scratch, according to your instructions. It is then checked by our plagiarism-detection software. There is no gap where plagiarism could squeeze in.

Read more

Free-revision policy

Thanks to our free revisions, there is no way for you to be unsatisfied. We will work on your paper until you are completely happy with the result.

Read more

Privacy policy

Your email is safe, as we store it according to international data protection rules. Your bank details are secure, as we use only reliable payment systems.

Read more

Fair-cooperation guarantee

By sending us your money, you buy the service we provide. Check out our terms and conditions if you prefer business talks to be laid out in official language.

Read more

Our Homework Writing Disciplines

With a highly diverse team in almost all academic fields including: