Nike Direct Marketing Nike - 1428 Words

Kristen Brink Professor Wang Final Assignment November 11, 2014 Nike Direct Marketing Nike, Inc. has been the world’s leading innovator and provider in athletic footwear, apparel, equipment and accessories for 50 years. Their mission has been to bring inspiration and innovation to every athlete in the world; if you have a body, you are an athlete. Arguably one of the most innovative companies in the world, Nike has built its brand into an iconic world-class powerhouse that continues to dominate the market with no signs of slowing up. Nike’s marketing and advertising have been breakthrough, aspirational, and legendary over the years, featuring high-profile athletes and heroes. Direct Marketing is the use of many media channels to communicate directly to the targeted customer. Nike sells its merchandise through retail stores and other channels. The company offers its products to retail accounts, through Nike-owned retail stores and Internet websites and through a mix of independent distributors and licensees, in virtually all countrie s around the world. Nike benefits a consumer will receive for purchasing certain products. Nike offers many things to their consumers. Nike participates in continuity selling. They try to keep their consumers by offering many things while a person is making a purchase. Nike uses a price skimming technique for some of their sneakers like the ‘Air Max’. They set up the sneakers at a high price only to lower the price as time goes by. NewShow MoreRelatedNike Inc. : The World s Leading Athletic Footwear, Apparel And Equipment Company894 Words   |  4 Pages Nike Inc. is the world’s leading athletic footwear, apparel and equipment company. Nike’s mission statement, â€Å"bring inspiration and innovation to every athlete in the world. If you have a body, you are an athlete† (Nike, 2016). Nike’s mission statement relates to every human on this earth regardless of size or shape. The two goals of Nike Inc. are to serve and inspire the athlete and to reach a large audience (Nike CR Report, 2014). Nike has done an incredible job meeting these two goals becauseRead MoreNike Strategy1302 Words   |  6 Pagesmodule Session Long Project I picked Nike, Inc as the multinational company to study. Here we will discuss the origin and history of this company and its profile. We will also cover Nike s international activities and how they managed to become today s world s leading supplier of athletic shoes, apparel and sports equipment. We will see how this company managed to expand internationally and control the sportswear arena completely by utilizing marketing strategy centering around brand imageRead MoreNike s Competitiveness And External Environment1488 Words   |  6 Pagesareas of interest. The political factors for Nike are the possibility of tariffs being imposed by the United States federal government in their overseas operations. According to the world manufacturing map, Nike has factories in 42 countries (Nike, Inc, 2017). Therefore, tariffs, sanctions, or embargos that could be placed because of turmoil in countries such as, Russia, North Korea, or Venezuela; have the potential to be catastrophic for companies like Nike. Consequently, all of their manufacturingRead MoreImc Nike875 Words   |  4 PagesIntegrated Marketing Communications: Nike Ashford BUS 615 (MOE1540A) Dr. Paula Zobisch October 12, 2015 Nike is known worldwide for manufacturing and selling performance shoes as well as shoes that have become a part of the world’s most fashion savvy athletes and laymen alike. Nike has a great corporate image and boasts the likes of the wildly popular classics such as the Air Jordan, the Air Max, and the Air Force One shoe. Nike has clearly devoted time, research andRead MoreNike954 Words   |  4 PagesNike. The Positioning statement of Nike is â€Å"For serious athletes, Nike gives confidence that provides the perfect shoe for every sport†. In today’s competitive environment, Nike, one of the global leaders in sporting goods industry, has established a strong position for enhancing athletic life style. It’s the number one sports manufacturer in the world design by Nolan Breitbarth in the 1970s with Phil knight founder of Nike Inc. It is the leading sporting goods Company in the United States andRead MoreNike s Code Of Conduct959 Words   |  4 PagesEvery year, about 900 million pieces of Nike footwear, apparel and equipment arrive at the right destination on time. The complex process involves more than 50 distribution centers, a network of thousands of accounts, and more than 100,000 retail stores around the world. As a leading company in footwear industry, Nike believes they have the responsibility to conduct their business in an ethical way and also expects the same of its business partners. Moreover, Nike focuses on working with long-term,Read MoreAdidas Referee Kits For International Association Teams1035 Words   |  5 Pagescountries.   Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Nike Inc.   an American multinational corporation that is involved in the design, development manufacturing and worldwide marketing and sales of footwear, apparel, equipment, accessories. Nike headquarter is located near Beaverton, Oregon, in the Portland metropolitan area. One of the world s largest suppliers of athletic shoes and apparel and a major manufacturer of sports equipment is Nike, with revenue in excess of US$24.1  billion in its financial year 2012. Nike has more than 44Read MoreMarketing Plan For Nike And Gatorade Essay1679 Words   |  7 Pagescompanies together as partners in more than just the way of marketing. The product idea for this assignment is a tube of lip balm with the electrolyte replenishment of Gatorade with the Nike logo. This marketing plan is designed for Nike and Gatorade and is meant to secure funding for a new product development project. The goal of this project is to increase the value of Nike cooperation as well as f inancial growth for the companies’ employees. Nike has launched several new products over the years sinceRead More Commodity Chain Analysis of Nike Shoes Essay1621 Words   |  7 PagesCommodity chain analysis of a Nike Shoe Introduction Since its creation, Nike has proven itself as a popular brand and it has created niches by selling products such as footwear, apparels and various types of sports equipment. This paper will attempt to trace the product development of Nike shoes from its origins in conception and design to the manufacturing and production process located in contract factories in developing countries to advertising and marketing of Nike as a cultural commodity andRead MoreCompany Overview: Nike, INC1106 Words   |  4 PagesNike, Inc. is the world’s leading designer, marketer and distributor of athletic footwear, apparel, equipment and accessories for a wide variety of sports and fitness activities. NIKE, Inc. sells, distributes and licenses its products in approximately 200 countries around the world. NIKE focuses its products in seven key categories: Running, Basketball, Soccer, Men’s Training, Women’s Training, NIKE Sportswear and Action sports. NIKE sells products through its NIKE Brand and Affiliate Brands (Converse

The Counter Birth Control Pills Essay - 1849 Words

Over the counter birth control pills have been a topic of discussion for many women. Some might say it would pose many risks such as not receiving medical checkups and not knowing the side effects of birth control pills. Others may see it as a helpful to women because of the convenience of accessing the pills and not having to take time to schedule appointments. Additionally, due to health care and insurance policies some women might not have an easy access to birth control pills but the cost should not be a factor. Although over the counter birth control would allow an easier access for women, there are reasons why a doctor’s visit and a prescription are required to receive birth control pills. Over the counter birth control pills could be a change for the contraceptive world. If a law were to pass by the Food and Drug Admiration to let women gain access to birth control without a prescription, women will not receive the proper health checks that they need. According to Morgan Greenwald (2015) a doctor’s consent is important to make sure women are screened for protentional dangerous health risk while taking the pill. Saving health insurance companies money is not worth the cost, doctors can monitor a woman’s body reaction to the type of birth control pill. Over the counter birth control would require multiple warning labels that women would not likely read. Birth control pills are used by many woman and making it over the counter would change how women viewShow MoreRelatedBirth Control Essay1027 Words   |  5 PagesBirth control pills should be available without a prescription. Oral contraceptive has been a controversial topic for years. Oral contraceptives are a common form of birth control. Birth control is used to prevent pregnancy by blocking a male’s sperm from fertilizing a female’s egg. Women take birth control to prevent pregnancy. Also, teen women can prevent unwanted pregnancies by having access to over the counter birth control pills. Birth control pills should be available without a prescriptionRead MoreBirth Control Essay1401 Words   |  6 Pages Should Birth Control Be Available Over the Counter? Birth Control has been a topic of debate for years. Several issues and opinions arise when talking about it. Birth Control was first released in the form of a pill in 1960. Since then birth control has evolved into several different forms, including pills, patches, implants, injections, and sponges. As stated by the Guttmacher Institute, â€Å"more than 43 million women of reproductive age are sexually active and want to prevent pregnancy, as of OctoberRead MoreBirth Control Drugs1119 Words   |  5 PagesMany would argue that birth control pills should not be sold without having insurance, however they should be. Statistics show that 80% of women use birth control for more than just having protected sex. Birth control pills are mostly viewed as just for sex, but there are many other uses for birth control. Birth control pills can be used for hormone control, to help acne, and they also help maintain a normal and regulated period. Birth control pills should be sold to not only te enage girls, butRead MoreBirth Control Essay927 Words   |  4 PagesBirth Control Over the Counter Birth control has been the topic of discussion lately. Individuals have been debating if birth control should be able to be received over the counter. That is up to the Food and Drug Administration because they are the ones who have to approve or disapprove. Drug companies and law makers should work together to change the rules and allow woman and teenage girls to have more easily acces to acquire birth control. Making birth control over the counter will be helpfulRead MoreBirth Control Is The Practice Of Preventing Unwanted Pregnancies1177 Words   |  5 Pagesprocess to obtain birth control pills. According to merriam-webster.com, birth control is the practice of preventing unwanted pregnancies; it used all around the world. There are many different contraceptive types that people use to prevent unwanted pregnancies, including, but not limited to, condoms, vaginal rings, sponges, implants, shots, abstinence, and birth control pills. Practicing safe sex should be ready option for all people. Men wear condoms while women take birth control; it is as simpleRead MoreThe Plan B Pill1608 Words   |  6 Pagesand Development in Cairo, women have the right to control the number and timing of their pregnancies. In order to exercise this right, women throughout the world need access to the different types of contraceptives, as well as to safe abortion services. While most contraceptives are used a s preventative measures prior to or during intercourse, some methods can be used within a short time after unprotected intercourse or failed use of birth control, which are usually referred to as emergency contraceptiveRead MoreShould Emergency Contraceptives Be Available Over?1411 Words   |  6 Pagesemergency contraceptives be available over the counter to girls under the age of 18? Plan B or the ‘morning after pill’ as it is sometimes known is an emergency contraceptive that is can prevent a pregnancy if it is taken within 3 days of unprotected sex or if your birth control failed you such as if a condom breaks mid intercourse. The Plan B contain a higher concentrated level of levonorgestrel which is the same hormone found in birth control pills. According to the Plan B website, when taken asRead MorePersuasive Essay On Birth Control1097 Words   |  5 Pagescontraception and how sometimes it’s uneasy to get a hold of. All through time birth control has received different opinions, and several people have tried to ban it altogether or even make it harder to get a hold of. In this essay, the struggles women face while accessing birth control, why it shouldn’t be banned, and the different viewpoints on this subject overall, will be discussed to provide a different perspective on why birth control should be available to all women. Women face many problems while tryingRead More Should the Morning-After Pill be Available Over-the-Counter?1374 Words   |  6 PagesShould the Morning-After Pill be Available Over-the-Counter? Last Tuesday, advisors to the Food and Drug administration voted to make the morning-after pill available over-the-counter (1). The FDA has not yet acted on this recommendation (1). The morning-after pill is the vernacular term for emergency contraception, specifically, two pills with the commercial name, Plan B, which have the ability to inhibit and, depending on ones perspective, possibly to terminate unwanted pregnancies. TheRead MoreThe Effects Of Oral Contraception On Women s Life1188 Words   |  5 Pagesunintended. 72.3% of these unintended births are publically funded. These unintended pregnancies cost $328.7 million a year; of this the federal government pays $266.8 million and Arkansas pays $61.9 million (Guttmacher Institute, 2016c). Summary: Oral contraceptives are accessible over the counter or from a pharmacist in over 100 countries, but at this time only two states in the United States, California and Oregon, have a law that permits women to obtain birth control from either of these sources (Wahlin

Eq Settings Guide free essay sample

This can result in a net cut of the bass frequencies. 200-GHz Boost: To add warmth to vocals or to thicken a guitar sound. Cut: To bring more clarity to vocals or to thin cymbals and higher frequency percussion. Boost or Cut: to control the woody sound of a snare. 400-GHz Boost: To add warmth to toms. Boost or Cut: To applying cut to some of the instruments in the mix to bring more clarity to the bass Nothing the overall mix. GHz-1 KHz Boost: To thicken vocal tracks. At 1 KHz apply boost to add a knock to a bass drum. 1-kHz Boost: To make a piano more aggressive.Applying boost between 1 KHz and KHz will also make guitars and baselines more cutting. Cut: Apply cut between 2 KHz and kHz to smooth a harsh sounding vocal part. General: This frequency range is often used to make instruments stand out in a mix. We will write a custom essay sample on Eq Settings Guide or any similar topic specifically for you Do Not WasteYour Time HIRE WRITER Only 13.90 / page 3-kHz Boost: For a more plucked sounding bass part. Apply boost at around KHz to add some definition to vocal parts and distorted guitars. Cut: Apply cut at about kHz to remove the hard edge of piercing vocals. Apply cut between KHZ and KHz to dull down some parts in a mix. 6-kHz Boost: To sweeten vocals.The higher he frequency you boost the more airy/breathy the result will be. Also boost to add definition to the sound of acoustic guitars or to add edge to synch sounds or strings or to enhance the sound of a variety of percussion sounds. For example boost this range to: Bring out cymbals. Add ring to a snare. Add edge to a bass drum. 10-kHz Boost: To make vocals more airy or for crisp cymbals and percussion. Also boost this frequency to add sparkle to pads, but only if the frequency is present in the original sound, otherwise you will Just be adding hiss to the recording.

Myth`s Theories Essays - Anthropology Of Religion,

Myth`s Theories There are four basic theories of myth. Those theories are: the rational myth theory, functional myth theory, structural myth theory, and the phsycological myth theory. The rational myth theory states that myths were created to explain natural events and forces. Functional myths are what you call the kinds of myths that were created as a type of social control. The third myth theory is the structural myth theory. This theory says that myths were patterned after human mind and human nature. The phsycological myth theory is the fourth myth theory which states that myths are based on human emotion. The rational myth theory states that myths were made to better understand natural events and forces that occurred in the everyday lives of people. This theory also explains that the gods and goddesses controlled all of these happenings of nature. Examples of this type of myth are creation myths from different cultures. Creation myths explain how man was created and explain what the gods and goddesses used and what actions they took to create humans. These myths also tell what substances were used (if any) in order for man to exist. The existence of man is a natural event but creation myths give other explanations. The functional myth theory talks about how myths were used to teach morality and social behavior. It states that myths told about what types of things should and shouldn't be done, and the consequences for those wrong doings. The functional myth theory also states that myths were created for social control and served the function of insuring stability in a society. A story about a tribe who rebelled against the great serpent, Degei, is a good example of a functional myth. This story is about a tribe who learned many skills from their great serpent god, Degei, and then became Degei's workers and servants. Two chiefs of this tribe were sick of working for him and tried to defeat him; they were too weak for Degei. Instead of winning their freedom, they were killed in a great flood caused by Degei. This myth is trying to say that you should not be lazy because if you are, then you will regret it. Structural myths are said to be myths based on human emotion. These types of myths show the two sides of the human mind; the good side and the bad side. They show the divided self and the duality of human nature. Myths about Hercules show how the human mind can be both good and bad. Hercules did both good and bad things. One of the bad things he did was (in "Jason and the Argonauts") he stole a broach pin from the treasure chamber of the god Talos. This sin caused his friend to be killed. Hercules knew that his friend was killed because of his sin, so to make up for it, he vowed to stay on the island until his friend was found. The phsycological myth theory states how myths are based on human emotion and that they come from the human subconscious mind. Cultures all around the world had similar fears, questions, and wishes which, to them, were unexplainable. That is the reason that phsycological myths were made; and that is why there are archetypes shared between cultures. Archetypes are general forms and characters used by all cultures. Some archetypes found between cultures are having a sky god (Zeus and Oleron),a sea god (Poseidon and Olokun), and an agricultural god (Orisha-Oko and Demeter). These archetypes are examples of how people think alike when it comes to things that are to them mysteries and fears. In conclusion, it appears that man created myths for quite a few reasons. These reasons include explaining the unknown, natural events and forces, to show the duality and pureness of human nature and the human mind, and to help societies maintain order and remain stable. There must be more reasons of exactly why myths should have arisen but that is beyond the extent of this essay.

Ethicals Ethics and Company Essays

Ethicals Ethics and Company Essays Ethicals: Ethics and Company Essays Here is a summary of the consequences of your decision to modify spot 'A': Director of Product Management:Your boss says, "I asked you to reach 15,000+ units a week. Your decision put us at 14,616 at the end of last week. While it's not what I asked for, it's in the ball park. You had better hope unit sales increase to meet projections in the coming weeks." Unit Sales:Medium increase, 2,616 units, potential for future increases looks good. HA advertising is losing out on the Sunday 3:00 - 4:00 market. Brand awareness increased 10 points among parents. Sales Team:The sales team is disappointed in your decision. They had hoped you would have gone with an option that would have increased their commissions more. Advertising to children is the act of marketing or advertising products or services to children. According to the characteristics of children , who are easy to be influenced and imitate, the advertising should be more carefully and strict. therefore, I think it will be a problem that advertising to children. A good and educational ad may guide children to the correct direction, but a bad one may misguide them both on mentally and behaviors. Turning Gears should try to alter its approach to limit concerns about negative impacts on kids. The influence of the advertisement to children is profound. thus, it is important for the company to discuss this problem. It is not necessary for the company to stop advertising to kids, but must change the way to advertising to children with positive impacts. What's more, it can also consult from parents, and make efforts about the problem together. Uncertainty touches most aspects of life, especially when we make decisions that have consequences that we cannot predict. It is natural that we can weigh up the possible results and their risks and benefits. Hence we should change the uncertainty into certainty though further research. The uncertainty will become a problem or a significant issue when you ignore it, or you insist on your own benefits as you find it out. We should accepting and realizing this principal uncertainty is a conceptual challenge, and it is within this framework that we must make decisions of a moral nature. Therefore, decision-making and the handling of uncertainties have important ethical dimensions. According to my opinion, adding labels would be the best way to resolve the problems of current situation. Before we make the decision, we should carefully take consideration about the consequence of insisting selling toys without any changes. It is an unethical behavior that make kids in an uncertainty dangerous situation. We also cannot solve the problem though replacing the material of toys because it is great harmful to company's benefits. therefore, it is the best way for the company to add labels on the toys to remind people to be careful about making choice. What should be put into consideration at first is the safety of customers, so it is the best way comparing with any other options. A company should response to pressure of shareholders groups when the resources related to 1) Company's mission statement. A company's mission statement is a constant reminder to its employees of why the company exists and what the founders envisioned when they put their fame and fortune at risk to breathe life into their dreams. So it's significant to response. 2) The consequence of issue harm. A company should also consider about the issue harm as it may result in kinds of serious consequence 3) Company's perspective. You cannot just consider about your own benefits but also the stakeholders benefits. otherwise, you don't need to response if it is not relevant to the things above. The main argument is whether child labor should be accepted. Based on the point of view of employers, it can be accepted because they think the manufactory has been provided higher payment and good quality of life for the children, and it also be accepted by the

Fun and Simple Mothers Day Activities for School

Fun and Simple Mothers Day Activities for School Moms are magnificent! To help celebrate all the things these wonderful women do, we have compiled some Mothers Day activities. Use these ideas to help your students show their appreciation for the terrific women in their lives. Fun Fact: Mothers Day dates back to the early 1800s. President Woodrow Wilson was the first to annually recognize this day as the second Sunday in May. Bulletin Board This show-stopping bulletin board is the perfect way to show appreciation to your students mothers. Title the bulletin board Moms Are Special and have the students write and illustrate why they think their mom is special. Add a photo and attach a ribbon to each students piece. The result is a stunning display for all of the moms. Tea-rrific Moms A perfect way to celebrate Mothers Day is to treat all of the mothers to a tea party to show them how terrific they are. Invite each mother to the classroom for some afternoon tea. Have students make each mother a card. On the card write, You are...and in the middle of the card, Tea-rrific. Tape a tea bag onto the inside of the card. You may wish to compliment the afternoon tea with fun appetizers, such as mini cupcakes, tea sandwiches or even croissants. Sing a Song Teach your students a special song to sing to their mother on Mothers Day. Here is a collection of the top songs to sing for the mothers. Write a PoemPoetry is a wonderful way to have your students express their love and appreciation for their mothers. Use the following word list and poems to help your students come up with a poem of their own. Use this list of words to help you create a poem, worksheet or creative writing activity.A collection of classic poems to print and attach with a gift or craft. Printable and Homemade Cards Cards are a wonderful way for children to express their feelings and show their mothers how much they care about them. These cards are great when youre short on time; just simply print out, have your kids decorate or color them and then sign their names.

Bioengineering in Food Research Paper Example | Topics and Well Written Essays - 1000 words

Bioengineering in Food - Research Paper Example 262). Hybridization, on the other hand, refers to the process of cross-breeding genetically dissimilar crops, both within and between species (Aheto, 2008, p. 77). Genetic engineering and hybridization differ in origin: genes from genetic engineering originate from any living organism, virus, or even chemical synthesis while genes from hybridization may originate from genetically different plant genera and families. Genetic engineering enabled food and crop scientists to manipulate the DNA of plants at molecular level. It has allowed possible transfer of DNA between two distantly species, unlike the traditional hybridization. Organisms that have been transformed using genetic engineering are often called transgenic organism, genetically engineered organism, or genetically modified organism (Wieczorek, 2003, p. 1); hybrid is the term used for organisms that underwent hybridization. The major differences of genetic engineering and hybridization in agriculture are noticeable in terms of results and economic impact. No matter how good the breeder is in choosing the best parents to cross or hybrid, the result is still unpredictable in the genetic levels. DNA of parent crops recombines randomly and may exhibit desirable traits such as pest resistance but the hybrid may also exhibit undesirable traits such as poor quality and lower yield. Because of the possibility to produce a crop which has undesirable characteristics and the great deal of effort required to separate undesirable from desirable traits, hybridization or traditional breeding is time-consuming, labor-intensive, and is not economically practical. Meanwhile, genetic engineering is economically practical as it allows segmentation of specific characteristics of DNA to be selected and removed unwanted traits, making the desired gene controlled, precise, and of high quality (Wieczorek, 2003, p. 1). Advantages of Bioengineering Wieczorek (2003) identified a few examples of benefits or advantages of bioengineer ing to the agriculture, among of which are: increased crop productivity, enhanced crop protection, improvements in food processing, improved nutritional value, better flavor, and fresher produce (p. 2-3). Genetically engineered crops increased crop productivity because it introduced qualities such as disease resistance and increased drought tolerance to the crops (Wieczorek, 2003, p. 2). Examples of which are the cases in University of Hawaii and Cornell University that developed two varieties of papaya resistant to papaya ringspot virus. The used of genetic engineering in agriculture has also increased crop productivity by developing drought-resistant plants that are capable of using water efficiently. Genetic engineering also enhanced crop protection and can make cost-effective solutions to pests’ problems (Wieczorek, 2003, p. 2). The research from the soil bacterium Bacillus thuringiensis has made protein in the crops such as corn, cotton, and potato into a protein that ki lls certain insects when they feed on the plants. This technological breakthrough is also the protein used in natural insecticides. The similar case applies to Bt engineered into a corn crop, making pest control more cheaply, more effective, and less expensive, but Bt crops are considered inacceptable because the entire

Letter to investor + MACROECONOMIC OUTLOOK (by region) Essay

Letter to investor + MACROECONOMIC OUTLOOK (by region) - Essay Example As compass helps a sailor in sailing to the right direction, our portfolio also helps the invested funds to move towards appropriate path of earning higher returns. Thus we expect that our portfolio is going to excel the benchmark and will beat the benchmark in near future. Our aim is to hit the MSCI benchmark that is our benchmark. We follow the strategy of efficiently allocating invested funds by investing largely in large or medium cap business enterprises. Our key strategy is to direct the funds towards value stocks as the time period of this portfolio is very short, only one year. This short time horizon does not allow us to put our prime focus on growth stocks. However, it does not mean that we never invested in growth stocks. In fact, we have invested in the growth stocks of Information Technology industry as it shows the best opportunity. We attempt to invest in defensive stocks to avoid cyclical economic fluctuations. It will take some time for the global economy to recover fully from the shock of the recent recession. Defensive stocks are able to generate higher returns than others during troubled times. In terms of geographic segmentation of invested funds, we efficiently divided our funds between the USA, Europe and the rest of the world. Since the USA is the largest economy of the world and it is recovering at a very fast pace, majority of funds is invested in the USA. The second largest part of the funds goes to European nations as they are performing better than the other countries of the world after the USA. The rest of the world gets the remaining funds. Again, thank you for investing with us. Sincerely Xxxxx MACROECONOMIC OUTLOOK United States The Unites States is the economic superpower of the world. But the recent economic recession was originated in this country. U.S.A has always been a dominant economic power in the world and it accounts for approximately 21 percent of the world economy. U.S. economic recession was held responsible for the global economic downturn as U.S. economy always influences economies of other countries in a major way. The major factor that has caused this huge economic downturn in U.S.A. was a huge credit crisis. The credit crisis is held responsible for the closure of a number of investment banks across the world. This credit crisis actually originated from the U.S. home loan market. This credit crisis was triggered by busting of a housing market bubble in 2006. The prices of housing started to fall rapidly since 2006 and the market collapsed. The fall continued throughout 2007 and 2008. With the starting of the year of 2008, U.S. sub prime-mortgage market started to encounter several problems, which appeared to be difficult to deal with. These resulted in an application of huge correction in this market, which had great implications for making credits more costly across the world. With the implementation of this correction, a large number of banks of the America, European countries as well a s of Asia had been forced to write down billions of dollars in their holdings. More shocking thing was that a number of well-established and reputed banks like Lehman Brothers had to file for bankruptcy. The bankruptcy of Lehman Brothers is considered to be the biggest ever case of bankruptcy in the history of U.S. Since 2008, more than 80 firms in U.S.A. only have filed for bankruptcy and a large number of firms have appealed to the government for financial

The stages in some types of storms (hurricane) Essay Example for Free

The stages in some types of storms (hurricane) Essay A hurricane is a wheather system that is usually described as a funnel of warm wet air, when warm moist air rises and encounter with the cooler air, it causes the warm water vapor to condense and form rain drops and dark clouds. Most hurricanes that occur in the Atlantic develops off the west coast of Africa. Hurricanes begins as thunderstorms which moves out over the warm tropical ocean water. There are three stages in forming a hurricane, tropical depression stage, the tropical storm stage and finally the hurricane. The first stage is called the tropical depression. In this stage an organized yet sustained thunderstorm with swirling clouds, rain, and wind speed of less than 38 miles per hour (mph). Sustained winds are normally classified as winds that persist for at least one minute in duration. Then with wind speed of 39-73 mph it becomes a tropical storm and a name is given to it. Tropical storms may evlove into a hurricane. This is also where the eye and eye walls of the storm are being created. Tropical storms can cause server damages to property and human as well. Death may occur depending on the storms position. With winds up to 200 mph and up to 600 miles across, finally a hurricane has formed. Believe it or not, hurricanes does an important job, it moves the heat from warm climate to cooler temperature zone. It may also take from hours to days to form a hurricane.

The Structure of Chinese Language and Ontological Insights :: China Chinese Language Essays

The Structure of Chinese Language and Ontological Insights ABSTRACT: Through a comparative analysis of the Chinese language, this paper discusses how the structure and functions of a natural language would bear upon the ways in which some philosophical problems are posed and some ontological insights are shaped. By this case analysis, the aim of this paper is to contribute to the elucidation of the relation between language and philosophy in this regard. 1. Introduction Through a comparative case analysis regarding the Chinese language, this paper discusses how the structure and functions of a natural language would bear upon the ways in which some philosophical problems are posed and some ontological insights are shaped. In so doing, I suggest and argue for a mereological collective-noun hypothesis about the denotational semantics of Chinese nouns. By this case analysis, the paper aims to contribute to the elucidation of the relation between language and philosophy in this regard. My discussion begins with a puzzle: why the classical Platonic one-many problem in the Western philosophical tradition has not been consciously posed in the Chinese philosophical tradition and why, generally speaking, classical Chinese philosophers seem less interested in debating the relevant ontological issues. (1) One suspects that the structures and uses of different languages might play their roles in pushing philosophical theorization in different directions; the ways of speaking and writing of the Chinese language might reveal and reflect Chinese folk ideology and then influence the ways in which certain philosophical questions are posed and certain ontological insights are formed. This puzzle is significant because it is concerned with a fundamental philosophical question about the relation between thought and language. The problem of relating Chinese thought to the structure and functions of the Chinese language has for generations tantalized sinologists and those philosophers who are concerned with the problem. Nevertheless, in the last decade, some significant progress has been made in this regard. In his book Language and Logic in Ancient China, (2) Chad Hansen advances a novel and provocative theory about the nature of the classical Chinese language. (3) The central thesis of Hansen's theory is his mass-noun hypothesis. Its main ideas are these: (1) the (folk) semantics of Chinese nouns are like those of mass-nouns (i.e., those nouns referring to the so-called interpenetrating stuffs, like 'water' and 'snow'), and naming in Chinese is not grounded on the existence of, or roles for, abstract entities (either on

Fv Project Summary of Fasb and Iasb

Project Summary Background The objective of this project is to provide guidance to entities on how they should measure the fair value of assets and liabilities when required by other Standards. This project will not change when fair value measurement is required by IFRSs. Discussion at the September 2005 IASB Meeting At the September 2005 meeting, the IASB added the Fair Value Measurements topic to its agenda. The aim of the project is to provide guidance to entities on how they should measure the fair value of assets and liabilities when required by other Standards.This project will not change when fair value measurement is required by IFRSs. Discussion at the November 2005 IASB Meeting The staff conducted an education session on the FASB's working draft of a final Statement on Fair Value Measurements. In addition, the staff reviewed the scope of FASB's Fair Value Measurements project as it relates to IFRSs and the issues and questions to be addressed in preparing an IASB Exposure D raft and related Invitation to Comment. No decisions were made.At a previous meeting, the Board decided to issue the FASB's final Statement on Fair Value Measurements as an IASB Exposure Draft with an Invitation to Comment. The appendices in the FASB document dealing with consequential amendments and references to US GAAP pronouncements will be replaced with proposed consequential amendments and references to IFRSs. The Board further decided that there should be limited changes to the FASB's document. Instead, the Invitation to Comment should discuss any areas where the Board disagrees with the FASB's conclusions along with the basis for the disagreement.The staff expects these areas to be identified during Board deliberations during the December 2005 and January 2006 meetings whilst aiming toward issuance of the IASB Exposure Draft by April 2006. Discussion at the December 2005 IASB Meeting Definition of fair value The staff presented a paper identifying and comparing the differenc es between the definitions of fair value in the FASB's draft Fair Value Measurements (FVM) standard to the definition in IFRS.This comparison was meant to assist the Board in concluding whether or not to replace the current IFRS definition of fair value with the FVM standard definition. The staff's overall recommendation was to replace the current IFRS definition of fair value with the definition of fair value in the FVM standard. However, the staff made it clear that it was not stating that this definition be applied to all instances where fair value is currently used in IFRS. This scoping issue is the subject for a separate discussion that would span several Board meetings.The Board discussed in detail, the various components of the current and proposed definition of fair value in the context of the staff's analysis. Although the Board was in overall agreement to proceed with the proposed definition in the FVM standard, the following points were noted: †¢ Certain Board member s wanted to see the various issues discussed pulled together and presented in some logical manner that would clarify how fair value is approached. As noted below, the Board was concerned that the proposed definition would cause confusion where this was not the intention. Some Board members were concerned about changing ‘amount' to ‘price' as this would change the meaning of fair value. This concern seemed to emanate around the treatment of transaction costs. †¢ The explicit discussion of ‘exit values' in the draft guidance was seen by some as problematic. Illustrations were provided indicating that at the time of the transaction; the agreed price constitutes both an ‘entry' and ‘exit' value for that specific asset or liability. Others indicated that it was their belief that the current fair value definition already encompasses an exit value notion. Following on from this issue, the notion of ‘marketplace participants' is believed by some Boar d members to be a less superior phrase to the widely accepted ‘knowledgeable, willing parties' notion which is more readily understood to apply to a transaction between two parties without the necessity of the existence of a ‘market'. The FASB's rationale for introducing the ‘marketplace participants' notion as a means of excluding to the greatest extent possible, any entity specific factors when determining fair value, was noted.The Board will be asked to debate the meaning of the ‘reference market' notion at subsequent meetings. Scope of the Fair Value Measurements Project The Board considered a paper setting out on a Standard by Standard basis, which individual standards should be scoped in or out of this project. That paper was organised into three sections: †¢ Standards that require fair value measurement †¢ Standards that require fair value measurement by reference to another standard †¢ Standards that do not require fair value measuremen t Within each of these sections, the staff made various proposals for the Board's consideration.Overall, the staff recommended not modifying as part of this project existing reliability clauses and practicability exceptions. The staff concluded that such modifications could result in significant changes to current practice and that any changes should be considered on a standard-by-standard basis separately from this project. Standards that require fair value measurement The following standards were noted as requiring assets or liabilities to be measured at fair value in certain circumstances: †¢ (a) IAS 11 – Construction Contracts †¢ (b) IAS 16 – Property, Plant and Equipment (c) IAS 17 – Leases †¢ (d) IAS 18 – Revenue †¢ (e) IAS 19 – Employee Benefits †¢ (f) IAS 20 – Accounting for Government Grants and Disclosure of Government Assistance †¢ (g) IAS 26 – Accounting and Reporting by Retirement Benefit Pla ns †¢ (h) IAS 33 – Earnings per Share †¢ (i) IAS 36 – Impairment of Assets †¢ (j) IAS 38 – Intangible Assets †¢ (k) IAS 39 – Financial Instruments: Recognition and Measurement †¢ (l) IAS 40 – Investment Property †¢ (m) IAS 41 – Agriculture †¢ (n) IFRS 1 – First-time Adoption of International Financial Reporting Standards †¢ (o) IFRS 2 – Share-based Payment (p) IFRS 3 – Business Combinations and the June 2005 Exposure Draft †¢ (q) IFRS 5 – Non-current Assets Held for Sale and Discontinued Operations The Board agreed with the staff recommendations (as set out in the observer notes) for each standard except in the following instances: †¢ IAS 18 – the staff concluded that in the instances where an entity received services for dissimilar goods or services, the measurement objective is not consistent with the draft FVM standard and therefore IAS 18 should be exclu ded from the scope.The Board noted this issue but indicated a preference to include IAS 18 within the scope of the FVM Standard as this is a minor part of the fair value requirements in IAS 18. The confusion caused in the market if the Board were to exclude IAS 18 from the project would be undesirable. †¢ IFRS 2 – due to the grant date model, the Board noted the issue that may arise where an entity measures a share-based payment transaction by reference to the equity instruments granted, not the goods or services received.However, the Board decided to include IFRS 2 within the scope of the FVM Standard on the same basis as for IAS 18. Standards that require fair value measurement by reference to another standard †¢ (a) IAS 2 – Inventory †¢ (b) IAS 21 – The Effects of Changes in Foreign Exchange Rates †¢ (c) IAS 27 – Consolidated and Separate Financial Statements †¢ (d) IAS 28 – Investment in Associates †¢ (e) IAS 31 â €“ Interests in Joint Ventures (f) IAS 32 – Financial Instruments: Presentation and Disclosure †¢ (g) IFRS 4 – Insurance Contracts †¢ (h) IFRS 7 – Financial Instruments The Board agreed with the staff recommendation that discussion of the above is not necessary as these standards do not contain any additional requirements to measure assets or liabilities at fair value. Standards that do not require fair value measurement †¢ (a) IAS 1 – Presentation of Financial Statements †¢ (b) IAS 7 – Cash Flow Statements (c) IAS 8 – Accounting Policies, Changes in Accounting Estimates and Errors †¢ (d) IAS 10 – Events After the Balance Sheet Date †¢ (e) IAS 12 – Income Taxes †¢ (f) IAS 14 – Segment Reporting †¢ (g) IAS 23 – Borrowing Costs †¢ (h) IAS 24 – Related Party Disclosures †¢ (i) IAS 29 – Financial Reporting in Hyperinflationary Economies †¢ (j) IA S 30 – Disclosures in the Financial Statements of Banks and Similar Financial Institutions †¢ (k) IAS 34 – Interim Financial Reporting (l) IAS 37 – Provisions, Contingent Liabilities and Contingent Assets †¢ (m) IFRS 6 – Exploration for and Evaluations of Mineral Reserves With regard to IAS 37, the Board concurred with the staff that the measurement principles therein are consistent with fair value principles in many respects and went further to state that when the amendments to IAS 37 are finalised, it would add explicit reference to fair value to clarify this issue. Discussion at the February 2006 IASB MeetingThis was a brief session to inform the Board about recent tentative decisions of the FASB on its fair value measurement standard. No observer notes were provided for this session. The FASB discussed the fair value hierarchy at its last meeting. FASB's exposure draft had proposed a five-level fair value hierarchy. The FASB has come to the conclusion that it is difficult to distinguish levels two to four in the hierarchy. They have therefore reduced the hierarchy to three levels. The FASB has not made other changes to its proposed fair value guidance.The staff said that discussion will continue in March. Discussion at the May 2006 IASB Meeting Principles of the fair value measurement project The following principles were put to the Board as those forming the foundation of the fair value measurement project: †¢ The objective of a fair value measurement is to determine the price that would be received for an asset or paid to transfer a liability in a transaction between market participants at the measurement date. †¢ The definition of fair value and its measurement objective should be consistent for all fair value measurements required by IFRS. A fair value measurement should reflect market views of the attributes of the asset or liability being measured and should not include views of the reporting entity tha t differ from market expectations. †¢ A fair value measurement should consider the utility of the asset or liability being measured. As such, the fair value measurement should consider the location and the condition of the asset or liability at its measurement date. The Board concurred with the staff that the above principles form the foundation of the fair value measurement project.Revised definition of fair value In the staff's view, the FASB's revised definition of fair value is substantively similar to the one tentatively approved by the IASB in December 2005. Based on that, the IASB agreed that the revised definition is consistent with the measurement objective. However, some Board members expressed concern about the change to a ‘price' rather than ‘amount'. In addition, the revised definition is based on an exit price notion that does not consider prices that exist other than the exit price.As a consequence, other Board members noted that the current definitio n will require measurement based on a hypothetical market that, for some types of assets and liabilities, cannot be calibrated with reality and in most cases will result in day 1 gains or losses, which constituents are uncomfortable with. Revised fair value hierarchy The draft fair value measurement statement indicates that valuation techniques used to measure fair value shall maximise the use of observable inputs and minimize the use of unobservable inputs.The hierarchy prioritises the inputs to valuation techniques used to measure fair value based on their observable or unobservable nature. The revised three-level hierarchy is summarised as follows: †¢ Level 1 inputs are observable inputs that reflect quoted prices for identical assets or liabilities in active markets the reporting entity has the ability to access at the measurement date. †¢ Level 2 inputs are observable inputs other than quoted prices for identical assets or liabilities in active markets at the measurem ent date. Level 3 inputs are unobservable inputs, for example, inputs derived through extrapolation or interpolation that cannot be corroborated by observable data. However, the fair value measurement objective remains the same. Therefore, unobservable inputs should be adjusted for entity information that is inconsistent with market expectations. Unobservable inputs should also consider the risk premium a market participant (buyer) would demand to assume the inherent uncertainty in the unobservable input.IFRSs currently does not have a single hierarchy that applies to all fair value measures. Instead individual standards indicate preferences for certain inputs and measures of fair value over others, but this guidance is not consistent among all IFRSs. The Board agreed with the staff's conclusion that the revised hierarchy in the draft fair value measurement statement is consistent with the principles discussed above and that the hierarchy in the draft fair value measurement statemen t represents an improvement over the disparate and inconsistent guidance currently in IFRSs.Unit of account and fair value measurements The Board agreed that it is not appropriate or practical to provide detailed guidance on the unit of account within the fair value measurement project. Determining the appropriate unit of account is a critical element of accounting and is not always consistent from one asset or liability to another or from one type of transaction to another. Determination of which market The Board agreed with the FASB's conclusion to adopt the ‘principal market' view.While this will result in a change from the ‘most advantageous' view currently in IFRS, the ‘principal market' view more accurately reflects the fair value measurement objective and provides a more representative measure of fair value by giving preference to highly liquid markets over less liquid markets. Transaction price presumption At the December 2005 meeting, the IASB tentatively agreed the fair value measurement objective was an exit price.The December discussion highlighted the conceptual difference between transaction price (what an entity would pay to buy an asset or receive to assume a liability) and an exit price objective (what an entity would receive to sell an asset or pay to transfer a liability). The staff concluded that an entity cannot presume an entry price to be equal to an exit price without considering factors specific to the transaction and the asset or liability. As a consequence, the staff plans to bring a separate discussion of day 1 gains or losses to the Board at a future meeting.The Board shared the concerns of the staff that if a transaction price were presumed to be fair value on initial measurement, entities might not sufficiently consider the differences between an entry transaction price and an exit fair value. As such, IFRSs should require an entity to consider factors specific to the transaction and the asset or liability in as sessing if the transaction price represents fair value. Fair value within the bid-ask spread Entities often transact somewhere between the bid and ask pricing points, particularly if the entity is a market maker or an influential investor.However, application of the rule in IAS 39 results in consistency across entities without consideration of entity specific factors that may influence where within the bid-ask spread the entity is likely to transact. Further, the rule creates a bright-line in quoted markets, thus limiting the use of judgement and subjectivity in the fair value measurement. The Board agreed to add a discussion to the invitation to comment that communicates agreement with the principle in the draft fair value measurement statement.The discussion would state that it is not appropriate to use a consistently applied pricing convention as a practical expedient to fair value. This recommendation would result in both a change to existing IFRSs as well as a departure from th e FASB's draft fair value measurement statement. Transaction and transportation costs in measuring fair value The definitions of transaction type costs vary in IFRSs, though such costs are consistently excluded from fair value measurements.Currently, IFRSs are not clear (with the exception of IAS 41) whether transportation costs are an attribute of the asset or liability, and as such should be included in the fair value measurement. The draft fair value measurement statement defines transaction costs as the incremental direct costs to transact in the principal or most advantageous market. Incremental direct costs are costs that result directly from, and are essential to, a transaction involving an asset (or liability).Incremental direct costs are costs that would not be incurred by the entity if the decision to sell or dispose of the asset (or transfer the liability) was not made. In the draft fair value measurement statement, the FASB concluded the fair value measurement of the ass et or liability shall include only those costs that are an attribute of the asset or liability. The FASB concluded transaction costs are an attribute of the transaction, not an attribute of the asset or liability.Therefore the fair value measurement of the asset or liability shall not include transaction costs. The staff agreed with the conclusions in the draft FVM statement regarding transportation and transaction costs. However, the staff concluded that the discussion of what types of costs are attributes of the asset or liability could be more robust as it is difficult to decipher justification for different treatment of transaction costs and transportation costs in the current discussion in the draft FVM statement.As such, the staff recommended, and the Board agreed that the invitation to comment should include a question on the sufficiency of the discussion of costs that are attributes of an asset or liability, such as transportation costs. Discussion at the June 2006 IASB Meet ing The Board continued its discussion of Fair Value Measurements (FVM), and reviewed the current project plan and due process steps. In addition, the Board had a preliminary discussion on accounting for ‘day-one gains'. Project Plan and Due ProcessThe Board was briefly updated on the developments from the last FASB meeting at which the Fair Value Measurements project was discussed. The Fair Value Measurement project was added to the IASB's agenda in September 2005. At that time, the Board decided that they would expose the FASB's final FVM standard as an IASB exposure draft, not modifying it other than change US GAAP references to the appropriate IFRS references. Since then, the staff has become aware of concerns raised by IASB constituents.These include: †¢ As the FVM project could change how fair value is measured, some think that proceeding directly to an IASB exposure draft based on the final FASB document could potentially short-cut the IASB's due process requiremen ts. †¢ As the FASB document applies a different concept of fair value from that of older IFRSs, constituents have problems with the conceptual reasons for changing to an ‘exit price objective' of fair value, particularly when an entity have no intention to sell an asset. As fair value is being increasingly used, fundamental questions regarding relevance and reliability need to be debated prior to completion of the project. Due to these concerns, the staff presented the Board with two alternative solutions: †¢ The first alternative was a modified plan which still would include issuing the FASB document as an exposure draft, in addition to conducting field visits and round-table discussions to get input from constituents. †¢ The second alternative was to issue the FASB document as a discussion paper, deliberate this, and then issue an exposure draft.This would allow the Board more time and more flexibility to address the concerns raised by constituents and hopeful ly a better standard, even if this route will be a longer one. The Board expressed sympathy for the concerns raised by the constituents, and the majority of Board members agreed that this would require a shift from the current project plan to alternative two which is to issue the FASB document as a discussion paper. However some Board members thought that the second alternative should be avoided as this would delay the issuing of a final standard too long.Alternative two will result in a final IFRS in late 2008 or early 2009. Some Board members thought that it would be crucial to communicate with constituents that this move away from the current project plan and towards the discussion paper route would take more time, but that it would be done to ensure the interest of constituents. The Board voted in favour of alternative two, resulting in a discussion paper being issued based on the FASB document. The Board noted that a final plan could not be put together before the final FASB do cument is issued. As long as the FASB have not issued their final document including, e. . their application guidance, the IASB will not have a public document accessible for issuing as the IASB's discussion paper. Day-one Gains and Losses Fair value, as defined in the FASB's document is an exit price. As a result of the Board's tentative approval of the exit price definition of fair value, in circumstances where an asset or a liability is required to be measured at fair value on initial recognition, a day-one gain or loss may be recorded. The staff believes the existing guidance in IAS 39 is inconsistent with the exit price notion as tentatively approved by the Board, and therefore needs amendment.The Board was asked whether they would consider: †¢ To make only consequential amendments to conform IAS 39 with the guidance in the Fair Value Measurement statement and to leave the current guidance on recognition of day-one gains and losses in IAS 39. †¢ Making consequential a mendments and change the existing guidance in IAS 39. The Board decided that they would not make any amendments right now, but rather put a question in the discussion paper whether this should be dealt with in a separate project or as a part of the Fair Value Measurement project.September 2006: FASB issues fair value measurement standard On 15 September 2006, the US Financial Accounting Standards Board issued Statement of Financial Accounting Standards No. 157 Fair Value Measurements. FAS 157 provides enhanced guidance for using fair value to measure assets and liabilities. It applies whenever other standards require (or permit) assets or liabilities to be measured at fair value. FAS 157 does not expand the use of fair value in any new circumstances. Click for: †¢ FASB News Release (PDF 19k) Special issue of the Heads Up Newsletter Summarising FAS 157 (PDF 218k) Some points about FAS 157: †¢ Fair value is the price that would be received to sell an asset or paid to transfe r a liability in an orderly transaction between market participants in the market in which the reporting entity transacts. †¢ Fair value should be based on the assumptions market participants would use when pricing the asset or liability. †¢ FAS 157 establishes a fair value hierarchy that prioritises the information used to develop those assumptions.The fair value hierarchy gives the highest priority to quoted prices in active markets and the lowest priority to unobservable data, for example, the reporting entity's own data. †¢ Fair value measurements would be separately disclosed by level within the fair value hierarchy. †¢ FAS 157 is effective for financial statements issued for fiscal years beginning after 15 November 2007, and interim periods within those fiscal years. Early adoption is permitted. †¢ FAS 157 may be downloaded from FASB's Website without charge. The IASB has on its agenda a project on fair value measurement.It is one of the convergence pr ojects with the FASB. This means that the IASB and the FASB plan to have similar, if not identical, definitions and guidance relating to fair value measurements. The IASB plans to issue a discussion paper in the fourth quarter of 2006 that will: †¢ indicate the IASB's preliminary views on the provisions of FAS 157; †¢ identify differences between FAS 157 and fair value measurement guidance in existing IFRSs; and †¢ invite comments on the provisions of FAS 157 and on the IASB's preliminary views about those provisions.Discussion at the September 2006 IASB Meeting The staff noted that FAS 157 Fair Value Measurements was issued on 15 September 2006 (see IAS Plus News Story of 19 September 2006). The IASB staff can now complete the preparation of an IASB Discussion Paper on Fair Value Measurements, which will comprise: †¢ FAS 157; †¢ excerpts of existing FVM guidance in IFRSs; and †¢ an Invitation to Comment that expresses the Board's preliminary views and requests constituent input on certain matters Non-performance riskThe Board noted that IFRSs currently do not discuss non-performance risk in relation to the fair value of liabilities. IAS 39 requires the fair value of a financial liability to reflect the credit quality of the instrument. Reflecting credit quality in the fair value measurement of a financial liability effectively causes the fair value measurement to reflect the risk that the obligation will not be fulfilled. FAS 157 extends this principle to the fair value measurement of both financial and non-financial liabilities.It was noted that non-financial liabilities include both credit risk (which related to the financial component) and non-performance risk (which related to the activity). After some discussion, the Board agreed to include a preliminary view in the invitation to comment agreeing with the concept that the fair value of a liability should reflect the non-performance risk relating to that liability (in additio n to credit risk). Issues in the Invitation to Comment Entry and exit pricesThe Board agreed that the Invitation to Comment should discuss the concepts of entry and exit prices without stating a preliminary view. The Discussion Paper will address two views without stating a preference. The discussion note that the notion of a price established between ‘a willing buyer and a willing seller' matters only when one is shifting markets. In many IASB standards, ‘fair value' is used to mean an exit price; in a few (such as IFRS 3, IAS 39, and IAS 41), the phrase is used to mean an entry price.Board members found using the same phrase to communicate two different measurement objectives confusing. Board members noted that they might need to reassess the measurement objective in IFRS 3, IAS 39, and IAS 41 should they adopt the approach in FAS 157 paragraph 17(d), which allows the use of a price other than the transaction price to represent fair value if the transaction occurred in a market other than the principal or most advantageous market. The staff proposed wording ‘on the fly', which they will bring back to the Board. Principal or most advantageous marketIAS 39 requires an entity to use the most advantageous active market in measuring the fair value of a financial asset or liability when multiple markets exist, whereas IAS 41 Agriculture requires an entity to use the most relevant market. By comparison, the FAS 157 requires an entity use the principal market for the asset or liability. In the absence of a principal market for the asset or liability, the entity uses the most advantageous market. The principal market is the market in which the reporting entity would sell the asset or transfer the liability with the greatest volume and level of activity for the asset or liability.The most advantageous market is the market in which the reporting entity would sell the asset or transfer the liability with the price that maximizes the amount that would b e received for the asset or minimizes the amount that would be paid to transfer the liability, considering transaction costs in the respective market(s). In either case, the principal (or most advantageous) market (and thus, market participants) should be considered from the perspective of the reporting entity, thereby allowing for differences between and among entities with different activities.The Board reconfirmed their view taken in May 2006, namely: When multiple markets exist for an asset or liability, the fair value measure should be based on the principal market for that asset or liability. If there is no principal market, the most advantageous market should be used. In both instances, the principal or most advantageous market should be determined from the perspective of the reporting entity. A question will be asked on this topic in the Invitation to Comment. Calling ‘level 3' measurements ‘fair value'The Board noted that FAS 157 establishes a three level hierar chy for categorising and prioritising inputs for fair value measurements. Level 3 of the hierarchy is ‘unobservable inputs' for the asset or liability (that is, they are not observable in a market). Unobservable inputs are used to measure fair value only to the extent that observable inputs are not available. These inputs reflect the reporting entity's own assumptions about the assumptions that market participants would use in pricing the asset or liability (including assumptions about risk).When Level 3 measures are used, FAS 157 prescribes additional disclosures. The Board agreed that the disclosure requirements in FAS 157 highlight sufficiently the nature of the fair value measurement so that users of financial statements can develop a view of the potential uncertainty of that measurement. Therefore, it would not be necessary to include in the Discussion Paper a discussion of whether measurements comprised of significant Level 3 inputs should be labelled something other tha n fair value. Block premiums and discountsThe Board agreed to address the issue of whether block premiums and discounts should be discussed in the Discussion Paper. Such premiums or discounts may arise when a larger-than-normal quantity of an asset or liability is being sold in a market. Board members noted that the requirement to use the ‘Price x Quantity' formula is limited to Level 1 measures, and that this opens the treatment of block purchases and sales to abuse, since it could be argued that these should be measured using Level 2 or 3 inputs.Board members also agreed that there is a need to distinguish illiquidity caused by the size of the block from that caused by the thinness of the market. The staff will draft a question on this issue for inclusion in the Invitation to Comment. Day 1 gains and losses The Board noted that an exit price measurement objective could have significant implications on certain fair value measurements in IFRSs, particularly in IAS 39 on initia l recognition. They reasoned that it is important to highlight situations where the guidance in FAS 157 differs significantly from current IFRSs.Further, convergence on the day-one gain matter is a high-profile issue to many large financial institutions and is an area where the staff expects many comments. The Invitation to Comment will contain a discussion and question on the transaction price presumption. US GAAP-specific material contained in FAS 157 The Board agreed that, in the interests of timely publication, they would not alter FAS 157 in any way for the purposes of the Discussion Paper and Invitation to Comment, and that it would therefore have US GAAP-specific material. The Invitation to Comment would note that any Exposure Draft would be IFRS-specific.Next steps On a poll, 12 Board members voted to issue the Invitation to Comment and Preliminary Views, and one Board member abstained, pending resolution of the discussion of entry and exit prices. The Discussion Paper is sc heduled for publication in late 2006. November 2006: Discussion Paper Issued On 30 November 2006, the IASB published for public comment a Discussion Paper on Fair Value Measurements. The Discussion Paper sets out the IASB's preliminary views on how to measure fair values when fair value measurement is already prescribed under existing IFRSs.It does not propose any extensions of the use of fair values. The DP is built around FASB's recently issued SFAS 157 Fair Value Measurements. SFAS 157 establishes a single definition of fair value together with a framework for measuring fair value for financial reports prepared in accordance with US GAAP. Click for IASB Press Release (PDF 53k). The Discussion Paper will be available without charge on the IASB's website starting 11 December 2006. Comment deadline is 2 April 2007 [extended to] 4 May 2007. The IASB plans to publish an Exposure Draft in 2008.Discussion at the January 2007 IASB Meeting Extension of the comment deadline on the Discussi on Paper The staff reported that several constituents had asked the Board to extend the deadline for comments on the Board's Discussion Paper Fair Value Measurements. The constituents highlighted that the comment period coincided with the financial reporting season for those with calendar year ends and asked for more time so that an important and complex document could receive the attention it deserved. The Board agreed unanimously to extend the deadline for comments to Friday 4 May 2007.Discussion at the September 2007 IASB Meeting The staff informed the Board that the FASB had formed a Valuation Resource Group (VRG). The purpose of the VRG is to provide the FASB with input for clarifying the guidance related to the application of the principles in SFAS 157 Fair Value Measurement when fair value is required or permitted under US GAAP. The VRG is drawn from accounting firms, valuation advisers, preparers, users, regulators and standard setters. The first meeting of the VRG is planne d for 1 October 2007. Issues raised at that meeting will be brought to the October FASB meeting.The IASB staff noted that any decisions made by the FASB are likely to have implications for valuations performed under IFRSs because constituents may apply the US guidance in the absence of IFRS guidance. The staff will keep the Board informed of the project. No decisions were made. Discussion at the October 2007 IASB Meeting The staff presented their analysis of comments received on the IASB's discussion paper on fair value measurement. The discussion paper was issued as a ‘wrap around' of FASB Statement of Financial Accounting Standards No. 157.The complete analysis is available in the Observer Notes section on the IASB's website (Agenda Paper 2C). The staff asked the Board to do the following: †¢ consider the main points raised in the comment letters (136 received); †¢ affirm the project objectives; and †¢ approve the staff's preliminary project plan. The main poi nts raised in the comment letter by constituents included (please refer to Agenda Paper 2C for a detailed analysis): †¢ General agreement to that the fair value measurement project is needed; †¢ Concerns about how to provide guidance on determining fair value when it is not clear in hich circumstances; †¢ The interaction between the fair value measurement project and the conceptual framework project (in particular, phase C which covers measurement); †¢ The view that in many situations an entry price notion is superior to an exit price notion; †¢ Fair value is more akin to a heading for a ‘family' of measurement bases and accordingly terms should be used which are more descriptive (that is, more clearly articulate what the Board's intended measurement basis in that situation is); and †¢ With regard to measuring liabilities at fair value, the respondents raised concerns about the application of a transfer notion instead of a settlement notion and as ked for guidance as to the meaning of non-performance risk. Regarding the interaction between this project and the Conceptual Framework project, some Board members noted that the outcome of this project is only one of a number of possible measurement bases that will be in the revised Framework. Consequently, the impact on the Framework project is only minor. The staff confirmed that it consults with staff of the Framework project on a regular basis. Some Board members observed that the notion ‘entry price' should be as well defined as ‘exit price'. Staff noted that this is part of the proposed project plan. No decisions were made.The Board was also asked to agree on the following project objectives: †¢ Development of principles and measurement guidance for an exit price measurement basis; and †¢ Completion of a standard-by-standard review of fair value measurements permitted or required in IFRSs to asses whether each standard's measurement basis is an exit pric e. If the Board does not agree, will it agree to decide on a case-by-case basis whether or not to develop measurement guidance for those other measurement bases. The Board agreed to both objectives. On the second bullet point, it was clarified that this analysis will not lead to the development of additional guidance for those measurement bases that will be identified as not fitting in the definition of fair value for the purpose of the fair value measurement project. However, the Board noted that a working definition for fair value must first be agreed on before the analysis can be done. Additional Discussion at the October 2007 IASB MeetingThis was an education session and accordingly no decisions were made. The session was led by representatives of the valuation profession to illustrate practical valuation concepts and issues (the complete presentation [Agenda Paper 11A] can be obtained from the Observer Notes section on the IASB Website). The focus was on the valuation methodolo gies used in the measurement of tangible and intangible non-financial assets. The background of the session was the Discussion Paper on Fair Value Measurements that was issued by the IASB in November 2006. The main topics of the presentation were: †¢ Value concepts in IFRSs †¢ The purchase price allocation process Overview of valuation methodologies (that is cost approach, market approach, income approach) The presenters' main focus was the valuation requirements resulting from a business combination and what are the factors valuation professionals consider in such transactions. Although this was an education session only the Board showed particular interest in certain topics of the presentation: †¢ If and how appraisers exclude entity-specific factors from their valuation models †¢ Customer-related intangible assets (separation and assumptions used in valuation) †¢ Consideration of tax in the valuation process †¢ Separation and valuation of contingent liabilitiesOn the last point, the representatives of the valuation profession admitted that they have difficulties identifying all contingent liabilities and how to value them based on a transfer notion (that is what would an entity have to pay to pass on the risk – in contrast to a settlement notion). Discussion at the November 2007 IASB Meeting The staff began the morning session by informing the Board about the latest developments in relation to the implementation of SFAS 157 Fair Value Measurements which is the basis for the Discussion Paper published by the IASB. The developments included the deferral of the effective date of SFAS 157 for non-recurring measurements (for example in business combinations).It was noted that these developments would have no impact on the IASB project on fair value measurements. The staff presented its preliminary definitions of ‘current exit price' and ‘current entry price' for assets and liabilities that will be used in the stan dard-by-standard review. The Board and the staff reiterated that they do not want to change the measurement within the standards. The goal of the analysis carried out by the staff would be to find out which measurement attribute the Board and its predecessor (the IASC) had in mind when using the term ‘fair value'. The preliminary working definitions of the staff are as follows: †¢ Assets: Current entry price: The price that would be paid to buy an asset in an orderly transaction between market participants at the measurement date. o Current exit price: The price that would be received to sell an asset in an orderly transaction between market participants at the measurement date. †¢ Liabilities: o Current entry price: The price that would be received to incur a liability in an orderly transaction between market participants at the measurement date. o Current exit price I (transfer notion): The price that would be paid to transfer a liability in an orderly transaction between market participants at the measurement date. o Current exit price II (settlement notion): The price that would be paid to settle a liability in an orderly transaction at the measurement date.At the request of a Board member staff confirmed that possible components of fair value will be addressed in later stages of the project. The staff also confirmed that it will involve practitioners to gain insight into current valuation practice in the specific circumstances. The Board had a short discussion on certain aspects of fair value measurement and was informed by staff that some of the issues will be discussed at the December Board meeting. The Board agreed on the preliminary definitions of current entry price and current exit price for assets and liabilities and that staff should not consider other measurement bases for the purpose of the standard-by-standard review.Discussion at the December 2007 IASB Meeting The purpose of this session was to continue the deliberations on the issues in the Fair Value Measurements Discussion Paper and to present an analysis of the ‘market participants view' under SFAS 157 compared to the ‘knowledgeable, willing parties in an arm's length transaction' in IFRSs. After staff review of the two approaches, the Board was asked if it agrees with the staff analysis on the market participants view. Some Board members raised concerns about the possible differences of the notion ‘market participants view' in comparison to a ‘knowledgeable, willing party'. The staff noted that they see no differences in content.One Board member asked why a change in terminology would then be necessary as constituents are familiar with the notion of a ‘knowledgeable, willing party'. Other Board members said that the document must make clear that the terms are interchangeable. After this the Board discussed what a market is and whether, for certain transactions, one can assume a market exists if, for example, actually onl y two parties are acting. As no definition of ‘market' was provided, the Board asked the staff to develop an analysis. As all further discussions depend on the outcome of that analysis the Board agreed to postpone discussion of the other items in the agenda paper to a later Board meeting. No further decisions were made. Discussion at the March 2008 IASB MeetingWhether the fair value measurement project should have a working group or other type of specialist advisory group The Board has on its agenda a project on fair value measurement that aims to provide guidance on how to determine fair value if a standard requires or allows fair value measurement. The staff informed the Board that it worked under the assumption that a working group would not be required as there is an overlap with existing working groups that could be involved as required. On further reflection, the staff has concluded that this approach does not work as it proved difficult to involve the other working grou ps without a clear mandate.The staff also believes that it would not be necessary to set up a formal working group but instead to establish a ‘technical advisory group' (TAG) that could work on a informal, as-needed basis. Information exchange could be done in person or via electronic communication. However, the IASB Due Process Handbook requires the Board's consent for not establishing a working group for a major project. One Board member raised the question whether the Valuation Resource Group of the FASB could be involved. The staff answered that this group would interpret and implement SFAS 157, the US standard providing fair value measurement guidance. The Board agreed not to establish a working group, but to form a technical advisory group instead. Discussion at the April 2008 IASB MeetingRepresentatives of the International Valuation Standards Committee (IVSC) presented an education session to the Board on four valuation issues. No decisions were made at this education session. The four issues presented by the IVSC delegation were: †¢ What is the difference between ‘price' and ‘value'? †¢ Is there a valuation difference between an entry and an exit price? †¢ Highest and best use †¢ What makes the market? What is the difference between ‘price' and ‘value'? The representatives made clear that in their view ‘price' is the amount agreed on in a transaction while ‘value' is the outcome of a valuation. In practice, most valuations assume a transaction but, depending on the purpose of the valuation exercise, a value could also be entity-specific.It was made clear that in many cases price and value would result in (nearly) the same number. It was also noted that the IVSC standards use three types of valuation with two of them taking a market view and one of them being an entity-specific approach – which could possibly result in different amounts for the same valuation object. Some Board member s were confused by the terminology used by the presenters and it was agreed that this could be the cause for much confusion within the constituency and that any communication by the Board must clearly articulate what they mean. One Board member noted that ‘value' must always be accompanied by an adjective as people understand different things in different situations.Other Board members were confused about where the difference in amounts results from. The IVSC representatives explained that there are many reasons (for example, synergies). Is there a valuation difference between an entry and an exit price? The delegation moved then on to the second question. The representatives explained that the profession holds the view that for non-entity-specific values entry and exit price for the same market should be the same. Often a perceived difference results because entry price is determined on a different market than the exist price. The Board had a lengthy discussion on that issue with a view on the guidance in US GAAP.Highest and best use The highest and best use is terminology from the US GAAP standard SFAS 157 Fair Value Measurements that assumes an entity would also use its asset the best way it can. It was highlighted that the SFAS 157 definition is very similar to the IVSC one. It was noted that this is not a different type or basis of value and that it is inherent in any basis that requires the estimate of an open market transaction. Some Board members expressed their doubt that this always could be assumed for liabilities. What makes the market? The representatives explained that there is an opinion that fair values could only be made where active markets exist.They made it clear that in their view this is not the case. The valuation profession assumes as long as there is enough evidence to establish a valuation it is assumed that a market exist even if the degree of reliability is lower than that for a market with frequent transactions. They would no t necessarily link value and liquidity. The Board showed interest in the valuation for some of the instruments where markets have contracted recently and had some debate on that point with the representatives. The Chairman closed the session by asking the IVSC representatives if they have experts on valuing liabilities that could participate in the planned IASB technical experts group.The representatives confirmed that such experts would be available to participate in the group. Discussion at the May 2008 IASB Meeting Discussion of the Meeting of the IASB Expert Advisory Panel on Valuing Financial Instruments in Illiquid Markets The issue was added to the agenda with short notice and no observer notes were available. The staff informed the Board that the Financial Stability Forum has established an expert advisory panel to assist the IASB in enhancing its guidance on valuing financial instruments when markets are no longer active. In addition the staff noted the following: †¢ T he first meeting will take place on 13 June 2008. †¢ At the first meeting the panel will decide on the form of guidance issued, e. g. est practice guidance or input for amendment of standards. †¢ The duration of the panel is expected to be two or three months. June 2008: IASB Forms an Expert Advisory Panel on Valuing Financial Instruments in Inactive Markets On 5 June 2008, the IASB formed an expert advisory panel on valuation of financial instruments in inactive markets, in response to Recommendations made by the Financial Stability Forum (FSF). The new panel will assist the IASB in: †¢ reviewing best practices in the area of valuation techniques, and †¢ formulating any necessary additional practice guidance on valuation methods for financial instruments and related disclosures when markets are no longer active.Organisations participating in the panel include AIG (American International Group); Basel Committee on Banking Supervision; BNP Paribas; Capital Interna tional Research Inc. ; Citigroup; Deloitte; Deutsche Bank; Ernst & Young; Financial Stability Forum; Fitch Ratings; Goldman Sachs; HSBC; International Association of Insurance Supervisors; International Organization of Securities Commissions (IOSCO); KPMG; Pioneer Investments; PricewaterhouseCoopers; Swiss Re; and UBS. FASB will have a staff observer. The first meeting of the panel will take place on 13 June 2008 in private session. A summary of the meeting will be presented to the IASB at its June 2008 meeting and will be published on its website. More Information on IASB's website. Related resources are available on our Credit Crunch Page.Discussion at the June 2008 IASB Meeting [pic]Fair Value Measurements – Expert Advisory Panel on Valuing Financial Instruments in Inactive Markets: Meeting update The staff presented a summary of the first meeting held on 13 June 2008 of the Expert Advisory Panel. The staff noted that the purpose of that meeting was to identify the issues arising on valuing financial instruments when markets are no longer active and that possible solutions will be discussed at future meetings. In addition the staff noted the following: †¢ No decision was made regarding the form of guidance the panel will provide, e. g. best practice guidance or input for amendment of standards. Subsets of the issues identified will be discussed by a subgroup of panel members at the next meetings in July (measurement issues) and August (disclosure issues). Meeting dates have not yet been confirmed. The meetings will be held in private sessions with public updates being provided at the July and September Board meetings. †¢ The last meeting is expected to be in September 2008. Updates on the activities of the panel are also available on the IASB's website. Discussion of the Fair Value Measurements Project Following the joint IASB-FASB meeting in April 2008 the Board discussed the way forward in this project. At the joint meeting the IASB decid ed not to re-debate all aspects of the Fair Value Measurement discussion paper (the DP), i. e. ot to fully re-debate FAS 157 Fair Value Measurements on which the DP is based. Instead the Board agreed to redeliberate certain areas of confusion or areas in which FAS 157 had proved difficult to apply. The staff presented an analysis of issues raised in the DP and provided recommendations on whether a particular issue should be redeliberated or not. Technical aspects of fair value measurement were not discussed at this meeting. The Board agreed to discuss further the topics listed below. These topics will be redeliberated mainly because the Board did not express a preliminary view in the DP and/or comments received on the DP indicated a need for further discussion: The exit price measurement objectiveThe Board agreed to consider both entry and exit notions of fair value measurement based on the standard-by-standard review currently performed by the staff. The market participant view In general the Board reaffirmed its preliminary view in the DP. However, the staff was asked to improve the wording in order to address concerns raised by constituents. In particular, it should be clarified how to apply the market participant view in cases where no market exists (for example, liabilities that cannot be transferred). Transfer vs. settlement of a liability The Board agreed to a staff analysis that this is an important cross-cutting issue for other Board projects, particularly, amendments to IAS 37.Transaction price and fair value at initial: Day one gains and losses This issue is considered to be interrelated with the entry vs. exit price issue. The principal (or most advantageous) market The Board reaffirmed the preliminary view in principal but noted that questions about the practical application needs to be resolved. Valuation of liabilities: Non-performance risk There seemed to be a broad consensus to reaffirm the preliminary view that non-performance risks needs to be considered when measuring the fair value. However, the majority of Board noted that this is an important cross-cutting and that there are unresolved issues with regard to presentation (of the counter-entry) and disaggregation. Highest and best useThe staff intends to address comprehensively all issues relating to ‘different markets'. Bid-ask spreads: Applicability of mid-market pricing to all levels of the hierarchy? The staff noted that the Board still needs to reach a preliminary and that the question of which transaction costs are to be included will be addressed in this context. Issues not discussed †¢ Disclosures: Redeliberation in light of current market environment †¢ Application guidance: Redeliberation in light of current market environment Topics not to be redeliberated The Board decided not to redeliberate the following five topics: 1. Attributes (characteristics) specific to an asset or liability 2.Whether transaction costs are separate from fair value The staff intends to discuss any outstanding issues in connection with bid-ask spreads. (this sentence relates to bullet 2) 3. Three-level fair value hierarchy Accepted as described in the Discussion Paper without any further deliberations 4. The prohibition of blockage factor adjustments at all levels of the hierarchy The Board had a thorough debate on this issue. One Board member emphasised that the majority of constituents disagreed with the preliminary view expressed in the DP. Finally, there seemed to be a consensus not to redeliberate the issue but to deal with the concerns in the feedback statement.The staff was asked to review the comments received to ensure that the Board ‘has not missed anything' in reaching the preliminary view. 5. The unit of account for financial assets and liabilities The staff noted that the topics not to be discussed by the Board are broadly consistent with the principles in IFRSs and that they can therefore be addressed in the exposure draft in a way that considers the concerns raised by constituents and is consistent with FAS 157. Discussion at the July 2008 IASB Meeting – Expert Advisory Panel on Valuing Financial Instruments in Inactive Markets: Meeting update The project manager on the fair value measurement project gave an oral update on the activities of the expert advisory panel.The purpose of this panel is to assist the IASB in reviewing best practices in the area of valuation techniques as well as formulating any necessary additional guidance on valuation methods for financial instruments and related disclosures when markets are no longer active. The panel or subgroup met three times. At the kick-off meeting the panel identified specific issues that panel members felt must be addressed (such as forced transactions, the use of pricing services, illiquid markets). It was noted that there seemed to be consistency in applying the fair value measurement requirements in IAS 39 despite the use of different tech niques. The staff informed the Board that there will be a draft document to be discussed end of July on those issues, but that it is not clear yet who will publish it. The panel would then turn to appropriate disclosures with the aim to have an exposure draft published in Q4/08.It was noted that there would be ongoing communications with the consolidations project team. Discussion at the July 2008 IASB Meeting At this session the staff asked the Board to decide on a definition of ‘fair value' – what is the measurement object for items with a measurement basis currently referred to as ‘fair value'? The staff acknowledged that some aspects of fair value have not been discussed yet, but will be brought to the Board at future meetings (for example, principal market and day-one gains/losses). Staff's view, however, is that whether fair value means an entry or exit price can be decided separately. The staff then turned to the standard-by-standard review as requested by the Board.This review had been requested to help the Board to decide whether: †¢ To retain the term ‘fair value' and define it appropriately, or †¢ To replace the term ‘fair value' with more specific terms more appropriate in the individual context. It was noted that a consistent definition of fair value might lead to fewer instances where the Board would require or permit its use. It was also highlighted that a precise definition of fair value would help to ensure proper application where it is required or permitted. The Board had a lengthy discussion about whether entry and exit price would be the equal for the same item on the same date in the same market.Also, the Board discussed which market an entity should refer to in measuring fair value and whether an exit price could include exit by consumption of assets. Board members expressed a range of views on these issues. No clear consensuses were reached. Some Board members observed that if the Board cannot cl early define what fair value means, it would be even more difficult for constituents in applying IFRSs. Board members said that some of the issues that are to be brought back for discussion at future meetings must be resolved before the Board can agree on a definition of fair value. The staff also asked the Board to consider whether to keep the term ‘fair value' or abandon it. The Board seemed to be split on that issue.The Board discussed whether, in measuring the exit-price fair value of an asset the entity is using, the measurement should take viewpoint of the entity or of an independent market participant. Board members' views varied, and no decision was reached. The staff distributed a flow chart which was not part of the observer notes that was intended to facilitate the discussion. The Board decided that, once fair value is precisely defined, each reference to fair value in IFRSs should be assessed in relation to the definition. Where ‘fair value' as used in an IFR S is not consistent with the agreed definition, the term should be replaced with a more descriptive term.Discussion at the September 2008 IASB Meeting – Credit Crisis: Proposed amendments to disclosure requirements Please see separate project page on Amendments to IFRS 7 – Credit Crisis Discussion at the September 2008 IASB Meeting – Expert Advisory Panel on Valuing Financial Instruments in Inactive Markets: Update The staff presented the Board with an update on the work of the expert advisory panel formed in response to recommendations from constituents. The panel's task is to develop best practice guidance on measurement and disclosures for financial instruments in inactive markets. It was noted that the panel had met six times and will meet again in October. One single document would be published covering both measurement and disclosure. A draft report has just been posted on the IASB's website. The staff informed the Board that although comments would be sol icited until 3 October, comment letters would not be published on the IASB's website.Asked by a Board member, the staff confirmed that this non-mandatory guidance would be considered when developing the fair value measurement standard and, hence, might become mandatory in the future. Discussion at the September 2008 IASB Meeting – Fair Value Measurements Exposure Draft The staff introduced the session by highlighting the objectives and timeline. The purpose of the session was to seek the Board's decision on: †¢ Whether a fair value measurement exposure draft should state that fair value reflects the highest and best use of an asset; and †¢ Whether blockage factors should be excluded from fair value measurement. Blockage factors The staff started with the second issue on blockage factors.The staff highlighted that it only sought the Board's input on this type of discount, not on other discounts or premia. The staff defined a blockage discounts as a discount that repr esents a discount to the quoted price of an instrument (usually equity securities) to reflect the reduction in the price if the entity were to sell a large holding of instruments at once. The Board had a lengthy debate on this. Some Board members were concerned about ignoring blockage factors as they would represent a real economic phenomenon. Others were of an opposite