Georgetown finance professor James Angel has written an interesting piece praising the benefits of what he calls mark-to-management (or what we fair value wonks would call Level 3 inputs), and argues the benefits of including all three dimensions of valuation (cost, market price and management models) in disclosures.  Of course we can’t recognize all of them on the face of financial statements, so Prof. Angel turns to XBRL disclosures as the savior, allowing people to do what they will with the three measurement methods.  Definitely worth a read, but the article does have some interesting ironies.  Prof. Angel justifies a need for mark-to-model because he believes markets are inefficient; but wouldn’t inefficiencies also (1) taint the model estimates due to inefficient recourse again misrepresentation and (2) cause incomplete responses to disclosures that are tucked in footnotes and tagged for XBRL?

The article is written in a very accessible way (it was written for lawyers, not empiricists), so you might consider assigning it to MBA students or even undergrads, as a good debate starter.