Surgent's Applying ASC 820: The Basics of Fair Value Accounting

Overview

While once thought just to apply to banking and financial institutions, entities now need to apply fair value accounting under ASC 820 across a variety of transitions. From financial instruments to leases, business combination accounting and impairment measurement, GAAP either requires or allows the use of fair value measures in an ever-increasing number of circumstances. Now is the time for you to get up-to-speed on the basics of the fair value approach.

In this course, we will review when fair value accounting is required and when an entity can select to use it. Then we will review the basics of the ASC 820 model, including the concept of "exit price," the various approaches which an entity may follow when using a fair value approach and the different levels of inputs which an entity may consider when determining fair value. Lastly, the course will provide examples on when and how to apply this complex accounting guidance.

Prerequisites

Experience in accounting and auditing

Objectives

• Recall when entities can elect and are required to use the fair value option
• Discuss the “Exit price” approach used in ASC 820
• Identify how to determine the fair value of assets and liabilities under the ASC 820 fair value approach
• Identify appropriate inputs to use when determining the fair value of an asset or liability

Highlights

• Applicability of the use of ASC 820
• The “exit price” approach
• Examples of market, cost and income approaches to estimating fair value
• Use of Level 1, 2 and 3 inputs in determining fair value