An Analysis of Financial Accounting Standards Statement No. 157 Analytical Essay by Nicky

This is an analytic essay on statement no. 157 released by The Financial Accounting Standards Board.
# 149596 | 1,323 words | 5 sources | APA | 2011 | US
Published on Dec 25, 2011 in Business (Accounting) , Accounting (General)

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This is a short essay on the financial statement released by the Financial Accounting Standards Board. The statement is titled No. 157 and is on the lack of clarity regarding fair value within the generally accepted accounting principles (GAAP). The writer discusses the document, stating it was incomplete or vague and this opened up to much room for the principle to be interpreted within. Statement no. 157 was originally released in 2007 and the writer discusses what happened with its release and what actions occurred afterwards.

From the Paper:

"Statement No. 157 also is to be used for derivative instruments. The main thrust of this statement is that it nullifies guidance that was previously issued and amends other previously issued guidance. This reflects the FASB's objective that Statement No. 157 begins to streamline the guidance with respect to fair value. Fair value guidance had been scattered throughout a number of different statements and 157 is intended to reduce the number of different statements containing fair value guidance.
"The previously-issued statements also did not always adhere to the framework that the FASB uses when issuing its statements. That framework was created with consistency in mind, such that financial statements can different issuers can be easily compared with one another. The process of streamlining the guidance with respect to fair value is part of the move towards increased consistency, beginning with consistency at the philosophical level.
"This statement has been ascribed by some as a cause of the current financial crisis. The case has been made before government, for example, that the markets for mortgage-backed securities and collateralized debt obligations were driven down by fear and speculation. The markets, therefore, were behaving irrationally, and irrational markets should not be used as the basis to value an asset (Gross, 2008).
"For a couple of reasons, however, this argument does not hold water. The first is that financial institutions have long used mark-to-market accounting (Gelinas, 2008). Remember that Statement No. 157 did not introduce new fair value methods, it simply clarified existing practice and provided guidance with respect to technique and disclosure."

Sample of Sources Used:

  • FASB Statement No. 157. Retrieved May 17, 2009 from
  • Gelinas, Nicole. (2008). 'Mark-to-Market' Isn't to Blame for Meltdown that Led to Crisis. Manhattan Institute. Retrieved May 18, 2009 from
  • Johnson, Sarah. (2008). The Fair-Value Blame Game. CFO Magazine. Retrieved May 18, 2009 from
  • Norris, Floyd. (2009). Blame the Accountants. New York Times. Retrieved May 18, 2009 from
  • Gross, Daniel. (2008). The Mark-to-Market Melee. Slate Magazine. Retrieved May 18, 2009 from

Cite this Analytical Essay:

APA Format

An Analysis of Financial Accounting Standards Statement No. 157 (2011, December 25) Retrieved June 03, 2023, from

MLA Format

"An Analysis of Financial Accounting Standards Statement No. 157" 25 December 2011. Web. 03 June. 2023. <>