SFAS 157: Fair Value Measurements Workshop

One day — 8 CPE Credits

HIGHLIGHTS:

• Understanding the provisions of SFAS 157

• Deepening and expanding your understanding with industry specific case studies and examples

• Applying the key concepts including exit cost, principle market, highest and best use

• Using the valuation methods: market, cost and income

• Implementing the three tier hierarchy of inputs to fair value measurements

• Building the required disclosures

• Understanding the complex valuation techniques required

• Deciding when to use a valuation expert

• Also included in the workshop will be the:

  • Latest updates on the SEC’s positions about mentioning the use of valuation experts in Forms 10-K and 10-Q

  • Latest perspectives on Fair Value from the SEC and FASB

  • IFRS issues in Fair Value

• And much more!

AGENDA:

8:00-8:30 a.m. – Registration and Breakfast

8:30-8:45 a.m. – Introduction and Course Overview

8:45-9:30 a.m. – The Big Picture of SAS 157

• The major issues and key part of SFAS 157

• Why has the FASB focused on fair value?

• SFAS 157:

  • The need for a consistent framework

  • Where the standard will likely affect accounting and reporting

  • Principles of the standard and requirements

  • Partial deferral

  • Where will the challenges and difficulties lie in using SFAS 157?

  • Principles vs. rules/use of judgment debates–will they impact application of SFAS 157?

• SFAS 159

9:30-10:30 a.m. – Deep Dive Area One - The FASB’S Definition of Fair Value

• Attributes of the asset, location, condition, etc.

• Exit price

• Principle or most advantageous market

• Market participant

• Highest and best use

• Role of credit risk

• What will be different in these definitions compared to pre-157?

• Day one and two issues

10:30-11:15 a.m. – Measurement Techniques

• Measurement methods

  • Income method

  • Cost method

  • Market method

• What is different from pre-157 approaches?

• What new knowledge will be required to use 157, audit 157?

11:15-Noon – The Hierarchy of Inputs and Disclosure Requirements

• The Hierarchy of Inputs

  • Definitions and examples of each

  • Disclosure implications

• Disclosure Requirements

• Lessons learned from early adopters

• The SEC’s Dear CFO letter

• The expertization issue and the SEC’s position

Noon-1:00 p.m. – Lunch

1:00-4:15 p.m. – Issues in Specific Cases and Challenges From Practice so Far

• How will you measure fair value?

  • Company generated estimates

  • Changes in models and assumptions

  • Blockage factors

  • Transaction costs

  • Sales restrictions

  • Subsequent information

• Issues with credit risk in the current environment

• What is an active market?

• What qualifies as market data?

• Nonperformance risk

• Externally generated estimates

  • Instructions to valuation firms

  • Review of assumptions

• Case questions – financial instruments vs. non-financial assets & liabilities

4:15-4:30 p.m. – Wrap-up and final Q&As

Course Objective: To learn the requirements of the Fair Value Measurements Standard, SFAS 157.
Delivery Method: Group-Live.
Prerequisites/Advance Preparation: None.
Experience level: Overview.

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