Financial Management Essay

assertion of pecuniary chronicle measuring rods (SFAS) no. 157 defines what is bazar shelter as understood in terms of generally accepted report principles (generally accepted explanation principles), and it also increases disclosure lookment active white set measurements. This latest Statement, effectual this 2007 is being do applicable to otherwise history pronouncements made preceding where in that location is a requirement or wages for use honorable order measurements of an accounting entities summations, liabilities and equity accounts. (Bernstein, 1993 Brigham and Houston, 2002).SFAS 157 thusly does non require any spic-and-span elegant respect measurements on the basis of the Financial be commonplaces Board having earlier determined that that plumb value is the relevant measurement assign (FASB, n. d. ). As to why the FASB needed to rationalize this SFAS, it may be recalled that before this Statement, the report profession has already been expos ed to several(predicate) comments of bonny value but totally had limited counselor 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 practicable inconsistencies of these guidelines hence may be held reverse gear into the FASB objective of applying GAA less complex. Increased unanimity and comparability in fair value measurements and for grow disclosures approximately 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 act of this Statement relate to the definition of fair value, the methods used to measure fair value, and the expa nded disclosures about fair value measurements, the differences should exactly be expected to arise on said points.Specifically, the present definition of fair value under SFAS 157 preserves the permute damage notion in earlier definitions of fair value. SFAS 157 however now makes the miniature that the exchange price is the price in an orderly transaction between foodstuff participants to sell the summation or maneuver the financial obligation in the grocery store in which the reporting entity would transact for the asset or liability, that is, the principal or most discriminatory 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. ). much(prenominal) definition of price is of course divers(prenominal) and should be distinguished on the price that would be paid to acquire the asset or received to assume the liability.It necessitate to be emphasized also that SFAS treats fair value as a market- ground 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 unrivalled public go with in the last 3 historic period that has had asset impairments and arouse a one paginate explanation of what the impairment was about and under what standard it was calculated. The keep company is selected is Standard story.Using its 2006 Annual Report, the company (Standard Register 2007b) has indeed asset impairment cyberspace Assets Held for Sale based on its notes to FS which provides In conjunction with the cl osing of the Terre Haute plant, in 2006 the caller-up recorded $1,474 of asset impairments, primarily link 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 landed estate valuations This paper submits that the impairment may have been calculated under SFAS zero(prenominal) 154, made effective on January 2, 2006, on Accounting Changes and Error Corrections which is a stand-in of APB Opinion No. 20 and Financial Accounting Standards Board (FASB) Statement No. 3. (Standard Register 2007a) 4. pass along 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, rudiments of Financial Management, Thomson South-Western, US, 2002FASB, Summary of Statement No. 157 Fair Val ue Measurements, (n. d. ) http// entanglement. fasb. org/st/summary/stsum157. shtml, vane text file 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