These are both references to the exact same pronouncement, however the codification is an attempt to bring all of the various standards under one umbrella for easy referencing and maintaining the most up to date records. Fair value is becoming a more widely used measurement in financial statements lately as they provide more timely information, despite not always being as verifiable as historical cost measures.
What is found within ASC 820 / SFAS 157?
First, this standard defines what fair value is as well as establishes the framework for measuring it. It discusses in which circumstances it is appropriate to use fair value measurements and in which it is not, as well as ranks the quality of the measurement based on the inputs used. These are split into three levels (level one, two, and three respectively) with level one being the best and three the worst. Certain disclosures in the financial statements must accompany these measurements in the footnotes to the statements as well so that users may understand which ones are being used.
Overall, the goal of ASC 820 is to increase transparency in fair value measurements for the users of financial statements as well as the comparability. Using fair value over historical cost increases the relevance of financial statements as well.
Update: ASU 2011-04 modified this standard.
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