fair value
Financial statements have seen an increasing move towards the use of fair values in accounting. Advocates of ‘fair value accounting’ believe that fair value is the most relevant measure for financial reporting whilst others believe that historical cost provides a more useful measure.
Issues have been raised over the reliability and measurement of fair values, and over the nature of the current level of disclosure in financial statements in this area.
Required:
(a) Discuss the problems associated with the reliability and measurement of fair values and the nature of any additional disclosures which may be required if fair value accounting is to be used exclusively in corporate reporting.
(b) Discuss the view that fair value is a more relevant measure to use in corporate reporting than historical cost.
Bibliography
1. This should contain full details of any material which you have read in order to gain a sufficient theoretical basis for your assignment. It can be separated into books, journals, newspaper articles if you like, although this is not strictly necessary.
2. Items should be listed in strict alphabetical order of the family name of the first author as they are listed on the book, journal etc.
3. If you are citing a journal item, the name of the article follows the author’s name, then the journal in which the article appeared.
4. Newspaper articles are similar to journal articles, since the name of the newspaper replaces the name of the journal.
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