The case against fair value accounting is pretty simple: The rule requires companies to value assets at market prices (based on recent transactions) even though the assets may in fact be worth more. But that really is an oversimplification that the FASB hopes to correct with its new guidance, released for comment on an expedited basis, that calls for more judgment when it comes to level 3 assets, reports CFO.com.

Companies have tended to value these thinly traded assets based on level 2 assets, in the absence of anything else, which implies a much lower price that often stems from a distressed transaction. The new guidance is an attempt to get companies to avoid distressed transactions when valuing level 3 assets. It certainly calls for more judgment and frankly a lot more work by internal staff. 

For more:
- here's the CFO.com article

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