ObjectiveIn September, 2006 the Financial Accounting Standards Board (FASB)  issued Statement of Financial Accounting Standards No. 157, “Fair Value Measurements,” (SFAS 157). This pronouncement defines fair value, establishes a framework for measuring fair value in generally accepted accounting principles and expands the required disclosures about fair value measurements. SFAS 157 does not require any new fair value measurements, rather it clarifies how to value assets and liabilities that must be disclosed on corporate balance sheets at fair value under previously issued pronouncements that require or permit fair value measurements, the FASB having previously concluded in those accounting pronouncements that fair value is the relevant measurement attribute. SFAS 157 is effective for all fiscal periods beginning after November 15, 2007, so March 31, 2008 was the first reporting quarter for most companies under its provisions. The goal of this research is to determine the economic impact of SFAS 157 for those companies that reported fair value measurements.
 Data
Our sample was all S and P 500 companies having March 31 first quarter closing dates. This resulted in a sample population of 303 companies.
Method
The financial statements and footnotes of all 303 companies were examined to determine the extent of the fair value measurements disclosed. Specifically, the following research questions  are addressed in this research:
1.      What proportion of sample companies were affected by SFAS 157 disclosure requirements?
2.      Did companies fully comply with the disclosure requirements of SFAS 157?
a.       A table showing quantitative disclosures.
b.      A reconciliation of the beginning and ending balances.
3.      What major categories of financial assets and liabilities were disclosed by enterprises affected by SFAS 157?
4.      To what extent is fair value used to measure financial assets and liabilities?
5.      What proportion of financial assets and liabilities are classified under each level of fair value measurement?
6.      Does the adoption of FAS 157 have a material impact on an enterprise’s results of operations, financial position and cash flow?
Expected Results
A preliminary analysis indicates that a large proportion of the sample was disclosed fair values measurements and that most of thwese3 disclosures relate to financial assets and liabilities. Additionally, given the current state of the economy, we expect that our sample of companies has suffered material losses on their financial assets.