Fair value is a relatively new concept. It did not feature in the academic debate on current values in accounting that raged (not too strong a term) in the 1960s. In those days, the current values that were debated as alternatives to historical cost, and to one another, were replacement cost (Gynther 1966), net realizable value (Chambers 1966) and deprival value (Baxter 1967). The term ‘fair value’ seems to have been used first by accounting standards setters in the United States2 and has subsequently appeared in UK standards, in international standards and in the Directives of the European Commission, in addition to some more recent standards in the US. The use of the term by standards setters has been to describe, rather loosely, a market-based current value, as opposed to traditional historical cost. The precise application of fair value has varied from standard to standard, and the United States Financial Accounting Standards Board (FASB) has recently developed a standard which prescribes a uniform method of calculating fair value, to apply within all standards that currently use the term. An exposure draft was issued in 2004 and the final standard was published in September 2006. The International

Accounting Standards Board (IASB) is committed, as part of its international convergence programme, to issuing a discussion paper (the first stage of its due process for developing a standard) based on the new FASB standard.