Question

The principles regarding trading securities and available-for-sale securities change as of 12/15/19. Access the "Recently Complete Projects" topic material. Search the "Recently Completed Projects" to locate the summary on the "Fair Value Measurement" or another relevant course topic. Summarize the changes and how they might affect a company's financial reporting. As a nonaccountant, explain why it is important to be aware of these types of updates.

Answer 1

Solution:-

According to Foster and Upton (2005), the changes of the Fair Value Measurement from Financial Accounting Standards Board are significant because it provides a framework to determine fair value for financial reporting. The definition “The amount at which that asset (or liability) could be bought (or incurred) or sold (or settled) in a current transaction between willing parties, that is other than in a forced or liquidation sale” (p. 2). The significance of the changes to that concept statement implies the fair approach to what is governed the facility – operation of the transaction, expectation, and measurement of the value technique. A Common example of a change that might affect a company’s financial report must establish how much an asset is expected to sell for or how much it would cost to sell a liability depending on the measurement date.