The Good, The Bad And The Ugly Of Statement 159 Issued last February, Statement 159 gave companies immediate and unprecedented flexibility in changing the way they account for a whole slew of financial instruments - from equity method investments to debt issued by the firm itself. The standard allowed quick-footed chief financial officers to take advantage of early implementation if they adopted the standard as of the beginning of the fiscal year beginning after 11/15/06, hadn't issued financial statements for the first quarter, and completed the adoption within 120 days of the beginning of the fiscal year. Very unusual implementation criteria, indeed. That first criteria - adoption allowed for fiscal years beginning in fiscal years after 11/15/07 - made it possible for the multitude of companies with November fiscal year ends to early adopt. The only companies with November fiscal year ends adopting the standard were the banking monoliths, however. A search of first quarter 10-Qs produced only sixty firms that adopted Statement 159. Out of those who chose the fair value option, some companies found good use for the standard: better balance sheet presentation, easier hedging, and simpler accounting for investments. Others managed to find the bad parts of the standard: they gamed the transition provisions in order to bury impairment charges. The ugly upshot: Statement 159 brings good and bad reporting to the investors' table, and it's up to them to figure out whether a company is using or abusing the standard. Investors need to understand Statement 159 pitfalls before its wider application in 2008.