FASB's Fair Value Frenzy In January, the FASB issued an exposure draft of a standard that could radically change the way financial statements look. By allowing firms the choice of reporting certain financial assets and liabilities at their fair values instead of their historical cost, financial statements might say more about the true state of corporate rights and responsibilities than they currently do. The downside: because it's a choice and not a mandate, firms won't be comparable to each other unless all of them decide to take the election or all of them reject the choice. One upside from the proposal: it could shore up balance sheets punctured later this year by another FASB proposal on pensions and other postemployment benefit obligations. Along with the "fair value option" proposal, the FASB has recently released Statements 155 and 156, which afford fair value treatment to certain hybrid financial instruments and servicing rights, respectively. There's a lot of commonality among those two standards and the more sweeping proposal, much of it favorable for both preparers and investors. Unfortunately, one common attribute is their "voluntary" nature.