Assets Without an Active Market

Instructions:

Read the following fragments from an article and answer the question:

Emily Chasan $(2008)$ was quoted as saying:

Christopher Whalen, managing director of the risk research firm Institutional Risk Analytics, remarked, "It's absurd to apply fair value accounting to assets with no market." All of the current volatility in financial reporting and disclosure is absolutely insane.

Ed Nusbaum, chief executive officer of the accounting firm Grant Thornton, stated, "Investors as a group need a better understanding of what volatility means." They desire to inhabit a perfect universe. They desire entire openness and absence of surprises. However, I believe it is unlikely that the recent large write$-$downs will be reversed.

Discuss the complexities of fair value accounting for assets with no active market.