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FAIR VALUE AND ITS DISCONTENTS

FAIR VALUE AND ITS DISCONTENTS. Remarks by Curtis R. Kimball, CFA, ASA CFA Society of Atlanta May 13, 2009. FAIR VALUE AND ITS DISCONTENTS. PREFACE The observations contained herein represent the personal opinions of the presenter and not the positions of his firm, his colleagues,

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FAIR VALUE AND ITS DISCONTENTS

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  1. FAIR VALUE AND ITS DISCONTENTS Remarks by Curtis R. Kimball, CFA, ASA CFA Society of Atlanta May 13, 2009

  2. FAIR VALUE AND ITS DISCONTENTS PREFACE The observations contained herein represent the personal opinions of the presenter and not the positions of his firm, his colleagues, nor the professional societies with which he is affiliated. Slide 2

  3. FAIR VALUE AND ITS DISCONTENTS CONCEPTUAL ISSUES WITH FAIR VALUE-BASED FINANCIAL REPORTING Unit of account Premise of value Going concern Liquidation Highest and best use Most advantageous market Fair Value Hierarchy Level 1: What is an active market Level 2: How reliable are observable inputs Level 3: Are entity-specific assumptions biased Slide 3

  4. FAIR VALUE AND ITS DISCONTENTS IMPLEMENTATION ISSUES WITH FAIR VALUE-BASED FINANCIAL REPORTING Consistency from period to period Consistency from reviewer to reviewer Reconciling the public market capitalization to the summed-up values of the business reporting units Fair Value in financial reporting conflicts with other value-reporting analysis Litigation risk in Fair Value accounting Slide 4

  5. FAIR VALUE AND ITS DISCONTENTS WHAT IS TO BE DONE? QUESTIONS & (MAYBE SOME) ANSWERS Slide 5

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