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December 13, 2010

Comments

J

As an accounting student set to graduate in a couple of months, your post was concise and insightful, and provided real-life examples. Thanks for helping me understand. How does this benefit the FASB to use a definition that doesn't fit with reality or common sense?
J

Tom Selling

J,
I'm glad this was helpful to you.

The FASB places a lot of consideration on what auditors think. Auditors recognize that current values are inherently subjective, and that exposes them to liability. I think the rules were largely designed to limit auditor exposure to liability, while at the same time giving issuers some options for measuring fair value.

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