TITLE

The Fairness of the Fair Value Concept

AUTHOR(S)
Kaur, Jasmine
PUB. DATE
November 2013
SOURCE
International Journal of Business & Commerce;Nov2013, Vol. 3 Issue 3, p1
SOURCE TYPE
Academic Journal
DOC. TYPE
Article
ABSTRACT
In recent years, international standard setters and regulators such as the International Accounting Standards Board (IASB) and the Financial Accounting Standards Board (FASB) have begun to favor the use of fair value accounting over historical cost accounting in financial reporting. A key reason for this shift in methodology is to improve the relevancy of the information contained in financial reports. The general principle underlying the shift is that up-to-date information improves investors' and regulators' abilities to make informed decisions. To date, the fair value concept is applied in several IASB standards such as IAS 16Property, Plant and Equipment; IAS 37Provisions, Contingent Liabilities and Contingent Assets; IAS 38Impairment of Assets; IAS 39Financial Instruments; IAS 40Investment Properties; IAS 41Agriculture;IFRS 2Share-basedPayment; and IFRS 3 Business Combinations. In principle, fair value accounting sounds attractive - surely if something is 'fair' then it must also be good? The implications for accounting practice, however, are huge and highly controversial. Amongst the questions being debated are: how reliable are fair values?; how easy is it to audit fair values?; will fair value accounting work in practice?; and what are the implications for performance measurement? Such a controversial topic is worthy of consideration by all practising accountants and the aim of this article is to discuss briefly the main issues relating to fair value accounting.
ACCESSION #
97719907

 

Related Articles

  • The Debate over Fair Value Reporting. Jordan, Charles E.; Clark, Stanley J.; Pate, Gwen R. // CPA Journal;Feb2013, Vol. 83 Issue 2, p46 

    The article reports that the U.S. Financial Accounting Standards Board (FASB) and the International Accounting Standards Board (IASB) have been slowly shifting from historical cost to fair value reporting for the past several decades. The two bodies have made known that fair market value is the...

  • Contract theory. O'Brien, Patricia C.; Scott, William R. // CA Magazine;Apr2012, Vol. 145 Issue 3, p44 

    The article discusses the new financial reporting's conceptual framework (CF) released by the U.S. Financial Accounting Standards Board (FASB) and International Accounting Standards Board (IASB) in 2010 and its relation to the contract theory. It examines the changes in the revised CF and offers...

  • Convergence's End Will Bring Opportunities. Herz, Robert // Compliance Week;Sep2013, Vol. 10 Issue 116, p1 

    The article presents the author's views about the end of the convergence program between the U.S. Financial Accounting Standards Board (FASB) and the International Accounting Standards Board (IASB). It says that the initiative led to converged standards on several topics including fair-value...

  • Managers brace for accounting changes. Rozanes, Deha // Pensions & Investments;7/25/2011, Vol. 39 Issue 15, p12 

    The article discusses issues related to development of new set of global accounting rules by the U.S. Financial Accounting Standards Board (FASB) and the International Accounting Standards Board (IASB). It has been reported that both of them have found common ground on several important issues...

  • A World of Fair Value. Pounder, Bruce // Strategic Finance;Aug2011, Vol. 93 Issue 2, p15 

    The article discusses changes in the fair-value provisions of the U.S. Financial Accounting Standards Board and the International Accounting Standards Board. With these changes, U.S. Generally Accepted Accounting Principles and International Financial Reporting Standards have become almost alike...

  • FASB DISAGREES WITH IASB OVER IMPAIRMENT.  // Accountancy;Sep2012, Vol. 149 Issue 1429, p60 

    The article reports on the disagreement between the International Accounting Standards Board (IASB) and the Financial Accounting Standards Board (FASB) in relation to the financial instrument impairment project.

  • IASB Vows Quick Financial Instruments Reform. Baker, Neil // Compliance Week;Jul2009, Vol. 6 Issue 66, p60 

    The article reports on the proposals published by the International Accounting Standards Board (IASB) that regards the classification and measurement of financial instruments in the U.S. It notes that the adoption of the proposals would substitute the fair value measurement guidance in...

  • Accounting in 2010: Major Advances in Rules Loom. Whitehouse, Tammy // Compliance Week;Jan2010, Vol. 7 Issue 72, p34 

    The article discusses the trend in financial reporting for 2010 in the U.S. which focuses on financial instruments, impairments, off-balance sheet and taxes towards International Financial Reporting Standards. It states that the Financial Accounting Standards Board (FASB) and the International...

  • Fair-value changes loom for alternative funds. Jacobius, Arleen // Pensions & Investments;7/26/2010, Vol. 38 Issue 15, p4 

    The article offers information on the changes in the Fair-value accounting laid by Financial Accounting Statement 157 and its impact on investment and private equity managers and venture capitals. It states that the new proposal will expect the managers to answer the asset's value and methods...

Share

Read the Article

Courtesy of NEW JERSEY STATE LIBRARY

Sorry, but this item is not currently available from your library.

Try another library?
Sign out of this library

Other Topics