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What are the advantages and disadvantages of fair value accounting?
Wiki User
∙ 15y ago
Advantage = its fair Disadvantage = some people don't like fair things
Wiki User
∙ 15y ago
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What is fair value accounting?
Fair Value accounting is an accounting term that requires a company to place a value on all of the assets on its balance sheet that is the price at which the assets could be sold. This is easy to do when the asset has a quoted market price. But it is often the case that there is no liquid market for an asset, and thus the company has to make an estimate of fair value. When the marketplace is in turmoil and illiquid, as it has been for much of 2008, companies are sometimes forced to place a very low value on an asset, resulting in a substantial mark-down from the prior value. See related links for complete explanations.
What is the Contradiction between historical cost and fair value?
Historical cost and fair value are opposite effects. Historical cost, also known as historical value, is what an item is worth due to its age. Fair value is what the actual value of said item is.
What is FMV stands for?
Fair Market Value
What is net fair market value?
The fair market value is the price of a property that may be sold and bought. It assumes both buyer and seller know everything about the property.
What is the SEC and how is it involved with accounting standard setting?
The SEC stand for Security Exchange Commission is a federal agency that enforces the federal securities laws. The SEC also requires certain companies like publicly owned companies follow a certain accounting guidelines called Generally Accepted Accounting Principles or GAAP. This guidelines defines what kind of accounting public companies shall use and it defines fair accounting practices. The SEC work hand in hand with the Financial Accounting Standard Board to update laws and accounting practices. They also set new laws to ensure the fairness of accounting practicing.
Advantages of inflation accounting?
An advantage of inflation accounting, is that it can correct problems with inflation. The negative part about inflation accounting is that it is not fair value accounting.
Advantages and disadvantages of fair trade?
There are a number of advantages and disadvantages to the fair trade system. Advantages include fair wages, a higher profit, and safer working conditions. Disadvantages of fair trade include the cost of certification and the favoring of co-ops over individuals.
What is Market to market accounting standards?
I think you mean "Mark to Market" which is an accounting technique in which assets are valued at their current market value and not a previous value or future value. Mark to Market is also known as "Fair Value" accounting.
Fair value changes are not recognized in the accounting records?
historical cost principle
Difference between book value and fair value in accounting?
Book value of asset is the value of asset shown in books of accounts while fair value of asset is the current price at which that product is selling or sellable in market.
What are the advantages and disadvantages of bill of exchange?
bill exchange is at an advantage of getting items by exchanging at a fair rate
What is the purpose of a culture-fair test?
The purpose of a culture-fair test is to eliminate any social or cultural advantages, or disadvantages, that a person may have due to their upbringing.
What is fair value accounting?
Fair Value accounting is an accounting term that requires a company to place a value on all of the assets on its balance sheet that is the price at which the assets could be sold. This is easy to do when the asset has a quoted market price. But it is often the case that there is no liquid market for an asset, and thus the company has to make an estimate of fair value. When the marketplace is in turmoil and illiquid, as it has been for much of 2008, companies are sometimes forced to place a very low value on an asset, resulting in a substantial mark-down from the prior value. See related links for complete explanations.
Is Mark to Market accounting accepted under generally accepted accounting principle?
no, it only accepts it once we take up fair values not the fair market values bcz somtimes market under value a perticular asset
What are the advantages and dis advantages of legislation?
Some advantages of legislation are that it helps to make the legal process more fair and it takes the will of the people into consideration. The disadvantages are that everyone will not aways agree and the results directly affect everyone.
What are the advantages and disadvantages of laissez faire economy?
Laissez fair is just one of those topics that is vital that is going to demand experienced intervention on
What is fair value?
Fair Value accounting is an accounting term that requires a company to place a value on all of the assets on its balance sheet that is the price at which the assets could be sold. This is easy to do when the asset has a quoted market price. But it is often the case that there is no liquid market for an asset, and thus the company has to make an estimate of fair value. When the marketplace is in turmoil and illiquid, as it has been for much of 2008, companies are sometimes forced to place a very low value on an asset, resulting in a substantial mark-down from the prior value. See related links for complete explanations.
