That is a pretty big topic, but I would encourage you to review two of the most important standards concerning fair value:SFAS 157, Fair Value Measurements, which defines fair value as “the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.”

SFAS 159 means that assets that were previously carried at lower of cost or fair value under U.S. GAAP can now be valued at fair value. Under fair value, adjustments can be made on a recurring basis, which means that if the fair value of an asset increases above the cost, that gain is recognized in the financial statements and the asset is adjusted to the higher amount. Under historical cost accounting, declines in fair value below the book value were recorded, but not the gains above it. That changes under SFAS 159.

Property plant and equipment are covered under IAS 16.

I have a question about a modification of the fair value. What does that really mean and what happens with the price then. This for an accounting project im working on at the moment at school. It would be great if you responded.

Awaiting your responce,

Jocelyn