There are no prerequisites.

Course Description

Fair values are more common in financial reports because they've increased in business importance in recent years. Increasingly elaborate financial instruments and risk management practices have created financial statement elements for which historical cost is almost irrelevant, while fair value and its fluctuations are extremely relevant. This course is a comprehensive survey of fair value accounting, and provides: (1) a discussion of ASC 820, Fair Value Measurements and Disclosures, (2) a list of the financial statement items for which fair value reporting is required or allowed, (3) a variety of valuation models, and (4) fair value disclosure requirements.


Delta Publishing

For many years, Delta Publishing has offered a wide variety of continuing education courses for financial professionals. Topics covered by Delta’s courses include accounting, financial management, budgeting, investments, financial statement reporting, business management, IFRS, ethics, valuations, real estate, and business writing. The diversity and breadth of Delta’s course offerings make the company a prolific and unique contributor to the CPE world. Delta’s well-credentialed authors and contributors have also been published in numerous academic and professional journals and quoted by some of the leading financial media outlets.

Course Specifics

Mar 2, 2018
There are no prerequisites.

Compliance Information

Qualifies for CA Fraud: No

Learning Objectives

Upon successful completion of this course, participants will be able to:

  • Identify the appropriate circumstances for using fair values in financial reporting.
  • Recognize the objectives of using present values and the elements used in present value measurement to help determine fair value.
  • Recognize several valuation models used in determining fair value for different assets and liabilities.
  • Calculate the present value for different investments.

Table of Contents

Learning Objectives

Fair Value Principle

Exhibit 1

Fair Value Hierarchy

Level 1: Quoted (unadjusted) prices in active markets for identical assets or liabilities.

Level 2: Inputs other than quoted prices included in Level 1 that are observable for the asset or liability either directly or indirectly.

Level 3: Unobservable inputs (for example, the reporting entity’s assumptions).

Using Cash Flow Information and Present Value in Accounting (SFAC No. 7)

Exhibit 2

Elements of a PV Measurement

  1. Estimates of future cash flows
  2. Expected variability of their amount and timing
  3. The price of uncertainty inherent in an asset or liability
  4. Other factors, such as lack of liquidity or market imperfections
  5. The time value of money based on the risk-free interest rate

Fair Value Measurements

Fair Value Option for Financial Assets and Financial Liabilities

Where are Fair Values Used in Financial Statements?

Fair Value Valuation

Examples of Valuation Models

Market Multiples


Net operating income (NOI)/purchase price



You would be willing to pay $144,522 for this property.

Matrix Pricing

Discounted Cash Flows (DCF)

Employee Share Options

Adjusted Replacement Cost

Illustrations of Fair Value Disclosures: Reliability Assessment

Review Questions

Review Question Answers and Rationales


Appendix - Walt Disney Disclosures


Fair Value Hierarchy: The priority of valuation techniques to be used to determine fair value into three broad levels.


Final Examination

Answer Sheet

Course Evaluation

Choose Your Preferred Format

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