FASB 157 Heads Up

In case you missed it, here's a friendly heads up that the Financial Accounting Standards Board, the organization that develops "generally accepted accounting principles," has issued new guidance regarding how your CPA should report the "fair market value" of your organization's assets and liabilities in your financial statements.   It is effective for financial statements for fiscal years beginning after November 15, 2007.

FASB 157 requires your CPA to determine "fair market value" (FMV) of your assets and liabilities rather than "book value."  It specifies three methods to determine FMV and requires the financial statements to disclose which method was used.  This shouldn't be a problem if your organization owns publicly registered securities, but determining the FMV of other non-cash assets, such as real estate, collectibles, closely-held stock, etc. can present lots of challenges to determine value.  That , in turn, could lead to an increase in your CPA fees.

If your organization does in fact have such assets or liabilities, I suggest talking to your CPA sooner rather than later so you are prepared to mitigate the potential impact of 157 on your audit expenses.