Statement 157: Making Fair Value Reporting Work In little more than a year, financial statements will bear disclosures with strange new terminology. Investors will be grappling with the meaning of things like "Level One inputs, Level Two inputs" and "Level Three inputs." What does that mean? Are they references to CFA examination results? Video game challenges? Different circles of hell? None of the above. (Although some reporting firms might conclude that they're the latter.) The answer is that they're references to a new broad-reaching accounting standard : Statement No. 157, "Fair Value Measurements." That standard will change the way many firms measure and report the fair value of assets and liabilities in their financial statements. It comes with its own warning system indicating when the reported numbers might deserve more investor skepticism: that's the message in those different "input levels." Understanding what's underneath those input level warnings is a necessary skill for investors to build before they start dealing with the warnings.