Statement 157 addresses the framework for measuring fair value and increases the range of required disclosures. Statement 159 is the fair value option, which gives organizations the option to measure certain assets and liabilities at their fair values.
This is an election to record financial assets and financial liabilities on the balance sheet at their fair values, and to record changes in these fair values over time. It is an election, so one can pick and choose the assets and liabilities to which it applies.
The fair value option can give management more reporting flexibility.
The fair value option will result in a mixed balance sheet, with some assets and liabilities recorded at fair value and others at cost.
The fair value option could be used to intentionally record a loss when initially recording an asset or liability at its fair value.