@article {Robak57, author = {Espen Robak}, title = {Fair Value of Illiquid Securities: Are We There Yet? }, volume = {11}, number = {4}, pages = {57--67}, year = {2009}, doi = {10.3905/JAI.2009.11.4.057}, publisher = {Institutional Investor Journals Umbrella}, abstract = {When the adopting release for FAS 157 was published back in 2006, it was inconceivable to many how controversial the standards would become. It has since been deemed responsible for everything from bank failures to the sharp downturn in structured credit markets. Further, this new accounting standard does not require a single new fair value measurement, nor were most of its principles a major departure from pre-157 valuation practices. The optimism of 2006{\textemdash}an era of seemingly unlimited credit expansion, where deals with exotic names like Mantoloking and Ballantyne saw fantastically low yields and AAA ratings{\textemdash}has dissipated. It is always tempting to shoot the messenger, and financial accountants had an unpleasant job to do, with or without new accounting principles. With this background in mind, it is easier to see how the turn in the business cycle might have rather more to do with the calls for a suspension of FAS 157 than the actual principles of the standard. This article provides a detailed analysis of FAS 157 with emphasis on valuation hierarchy, exit price concept, and illiquidity discounts as they relate to auction-rate securities, restricted securities, LP interests, warrants, and convertible securities. {\textquotedblleft}PEIGG is not a standard setting body and the FASB does tell us what fair value is and those are the rules we follow. Guidelines are fine, and it{\textquoteright}s a start, but we{\textquoteright}ve got to get to fair value.{\textquotedblright} Private Equity Leadership Summit.1 TOPICS: Real assets/alternative investments/private equity, security analysis and valuation, information providers/credit ratings}, issn = {1520-3255}, URL = {https://jai.pm-research.com/content/11/4/57}, eprint = {https://jai.pm-research.com/content/11/4/57.full.pdf}, journal = {The Journal of Alternative Investments} }