I think fair value has too broad of a range and Wall Street has demonstrated an inclination to take profits whenever they can. This means they will show a tendency to overstate assets, understate liabilities, and classify gains as profits, even when accounting rules determine some gains are not profits. The concept of writing assets up to fair value gives them more opportunity to do this. Just as they want a bailout for losses, but want to run with profits, it is more likely firms will jump at the chance to write up assets, and not be as willing to write down assets to fair value when the market devalues them. Just look at the mark to market backlash that occurred for banks when assets were devalued, but no one was concerned when they were seriously overvalued.
At least now, with historical cost, everyone is on the same page, and everyone knows exactly what the asset was actually purchased for. Who knows what logic firms will use to write up their assets in the future. Under audit is must be appraised, but this invites a broad range of possible prices. Of course the company will want the highest appraisal. We know the collusion that took place in the mortgage crisis. Let's hope fair value does not afford companies the same opportunity to creatively book gains and inflated assets. The historical cost basis of recording assets prevents this type of scheme since what you paid for it is what you paid for it.