Case Journal of Accountancy Fair Value Accounting

Case  Journal of Accountancy Fair Value Accounting 
For this case, I would like you to read an article called “The Role of Fair Value Accounting in the Subprime Mortgage Meltdown”, by Michael R. Young, Paul B.W. Miller and Eugene H. Flegm.  This article was published in the Journal of Accountancy in May 2008.  
Since this is such a “hot topic” the main goal of the case is to give you exposure to a cutting edge accounting issue.  
For the case, I would like you to form your own opinion on fair value accounting and in a written summary support why you believe your opinion is right.  Two typed pages are the maximum for the assignment and you should work individually.  Of course, it will be necessary to indicate what is “wrong” with opposing theories discussed in the article (i.e. state what you disagree with and why you feel that way).  
Don’t be afraid to voice your opinion.  The grade will be assigned purely on how well-documented, thought-out, and written, your work is (i.e. there is no right or wrong, your views merely have to be supported).  Shorter papers may also address the questions - two pages is the max).  To ease your fears, the accounting community also has widespread views on these issues.  
I realize you may wonder ‘where and how do I start’.  First, read the article keeping the following questions and considerations in mind.  They may give you some ideas that you feel strongly about.  You need not address each one in turn, think of them as food for thought in fueling YOUR ultimate conclusion.
If you use ANY sources appropriately cite and document them.  I will NOT tolerate plagiarism.  Any work from other sources you attempt to pass off as your own thoughts or writing will result in a ZERO.
For your consideration in reviewing the Journal of Accountancy article bear the following in mind:
•	"When things are returning to normal" is "when accounting approximates reality." 

•	What is the difficulty with using fair value in financial reporting in today's market circumstances?

•	Compare and contrast, in a summary form, mark-to-market accounting for financial assets, versus historical cost methods for these types of assets.

•	Does marking to a nonexistent market communicate information?

•	Is marking to market just a “guestimate” of ultimate value?

•	Consider how fair value helps support the “objectives of financial reporting”.

•	What do you think should be done now to restore trust and promote ethics?

•	Are accountants fulfilling their responsibility to stakeholders?

•	Do you think mark to market accounting ‘made things worse’ (exacerbated the problems in the financial markets)?

•	Were there already problems in the market before fair value became an issue (were the markets already ‘squishy’)?

•	What is your reasoned opinion on what you would like to see from accounting for this issue?