This video discusses the fair value option in financial accounting. This option allows companies to elect to account for most types of financial instruments at fair value, with unrealized gains or losses flowing through Net Income. Thus, a firm could elect to treat a held-to-maturity investment or an investment that would otherwise qualify for the Equity Method (if you own 20% to 50% of the investee) at fair value. The election to account for a financial instrument at fair value is irrevocable, is made on an instrument-by-instrument basis, and can only be made at certain times (which are discussed in the video).