Following a landslide of demand in recent months, the Financial Accounting Standards Board is initiating new projects to provide new guidance on measuring fair value.

FASB Chairman Robert Herz opened the board’s regularly weekly meeting by announcing a lineup of new agenda items that will help answer persistent questions on measuring fair value, particularly in the current environment where market activity is anything but routine. On the top of the list, the board is taking up a short-term project to provide guidance on how to apply Financial Accounting Standard No. 157: Fair Value Measurements while markets are dysfunctional.

“We’ll look at things such as whether there’s useful guidance we can provide on distinguishing active from inactive markets, the factors to identify when certain transactions should be viewed as distressed, and how they should weigh into the determination of fair value,” Herz said. “We’ll also look at potential additional disclosure requirements under FAS 157 as a number of users have asked us.” Such disclosure requirements would look at the sensitivity analysis and transfers of assets among various categories, issues that users of financial statements have said they can’t fully comprehend by reading disclosures prepared under current guidance.

The new guidance would be in addition to guidance FASB is already developing to make the annual fair value disclosures found in FAS 107: Disclosures about Fair Value of Financial Instruments required on an interim basis as well, said Herz.

The Securities and Exchange Commission and FASB’s Valuation Resource Group have urged FASB to consider guidance on these key trouble spots as preparers and auditors wrestle over how to measure value based on market activity when market activity has evaporated for certain categories of financial assets. The SEC called for guidance in its congressionally mandated study on mark-to-market accounting, and the VRG reiterated there’s confusion and diversity in practice on these key points. FASB also got an earful at various series of roundtables in recent months calling for guidance on these topics.

In a separate project, the board will look at how to measure net asset value for alternative investments, a topic the American Institute of Certified Public Accountants has raised in a white paper. The board also is opening a project to look at an application issue relating to accounting for deferred taxes and liabilities on available debt securities that are expected to be held to recovery, said Herz. “Right now there are two methods out there in practice,” he said. “The SEC staff has said they would in the interim accept both provided there’s a policy disclosure, but people believe there should be one method, so we’re going to look at that.”

Finally, Herz said the board will look at a series of other issues including real estate funds reported under the investment company guide, oil and gas disclosures in light of recent SEC guidance, and whether it’s possible to broaden the application of FAS 160: Noncontrolling Interests in Consolidated Financial Statements, though he didn’t say how it might be broadened.

FASB has repeatedly resisted providing application guidance on new standards as it tries to move U.S. accounting toward a more principled, less prescriptive approach. As Herz wrapped up the description of the full slate of new projects, board members exchanged barbs over the volume of guidance being undertaken. “Full employment,” Herz remarked.