scholarly journals Does Market Welcome the International Convergence of Fair Value Standard in China?

2017 ◽  
Vol 3 (2) ◽  
pp. 1
Author(s):  
Dehong Wang ◽  
Jianbo Song ◽  
Yue Zhang
Keyword(s):  
Fair Value ◽  
Measurement Standard ◽  
Accounting Standard ◽  
Market Reactions ◽  
Fair Value Measurement ◽  
Draft Version ◽  
International Convergence ◽  
Application Of Cas ◽  
Value Measurement ◽  
The Way

This paper studies the international convergence of fair value measurement standard and examines market reactions towards the emergence of the standard in China. Through comparing the fair value measurement standard between IFRS 13 and newest Chinese accounting standard CAS 39, we find that CAS 39 is on the way of international convergence towards IFRS 13. Through examining market reactions to CAS 39, we find that market has significantly positive reactions to the draft version exposure, official announcement, and enforcement of CAS 39. Moreover, we find that investors have different attitudes to the applications of CAS 39 in financial and non-financial industries. Investors consistently support CAS 39 in non-financial industries. However, in financial industries, investors react positively in the draft version exposure of CAS 39, but negatively in the official announcement and enforcement of CAS 39. We believe that investors worry about the application of CAS 39 in Chinese financial industries.

Issues on the application of IFRS9 and fair value measurement for Islamic financial instruments

2016 ◽  
Vol 7 (3) ◽  
pp. 202-214 ◽  
Author(s):  
Zurina Shafii ◽  
Abdul Rahim Abdul Rahman
Keyword(s):  
Cash Flow ◽  
Fair Value ◽  
Financial Assets ◽  
Financial Instruments ◽  
Fixed Rate ◽  
Accounting Standard ◽  
Content Type ◽  
Starting Point ◽  
Fair Value Measurement ◽  
Value Measurement

Purpose This paper aims to examine some issues in IFRS9 with regards to classification and measurement of Islamic financial assets. In addition, the paper discusses the Shariah concerns on the use of fair value to measure financial assets. Design/methodology/approach This paper adopts qualitative method via the study of documents and textual analysis of Shariah opinions of scholars and relevant accounting standards. Findings The paper found that the classification and measurement of equity-based Islamic financial assets do not fit into the “default” classification category of amortised cost, as the future cash flow receivable does not constitute solely the payment of principal and interest (fixed rate payment). With regards to fair value measurement, Shariah concern arises during the adoption of fair value at Level 2 (reference of asset values from input other than quoted prices in active markets) and Level 3 (use of discounted cash flow method to arrive to asset valuation) because of the existence of in uncertainty or gharar as compared to Level 1 (fair value referred to quoted prices of similar assets). Practical implications Findings of the paper provide a starting point for a debate and extensive research on issues related to classification and measurement of Islamic financial assets and the use of fair value as a method of subsequent revaluation of Islamic financial assets. The Shariah analysis in the paper is useful for International Accounting Standard Board to engage with Islamic financial institutions and local accounting standard setters to reflect the unique nature of Shariah-compliant financial instruments. The paper serves as a basis to devise technical solutions to address accounting and reporting issues of Islamic financial instruments. Originality/value The paper offers Shariah analysis on the issue of classification, measurement and impairment model for Islamic financial assets. The paper is considered as the first paper that examines areas of possible tensions when applying IFRS9 to the accounting of Islamic financial assets. In addition, the paper has contributed to the literature in Islamic accounting and auditing.

Fair value measurement of inventories and property, plant and equipment in the Russian accounting of organizations that are not budgetary sphere organizations: scope and features of formation

2021 ◽  
pp. 6-15
Author(s):  
Emilia Sergeevna Druzhilovskaya
Keyword(s):  
Method Comparison ◽  
Fair Value ◽  
Healthcare Organizations ◽  
Accounting Standard ◽  
Broad Application ◽  
Fair Value Measurement ◽  
Analysis And Synthesis ◽  
Grouping Method ◽  
Value Measurement ◽  
First Time

The Federal Accounting Standard (FAS) 5/2019 “Inventories” provides for a fairly broad application of fair value measurement of the inventories of non-budgetary sphere organizations (including healthcare organizations). An even more active use of fair value is suggested by FAS 6/2020 for the measurement of property, plant and equipment of the aforementioned organizations. The specified value is entered into the domestic accounting of the listed assets for the first time and is unusual for many Russian accountants. All this indicates the relevance of a detailed study of issues related to the fair value measurement of inventories and property, plant and equipment of the aforementioned organizations. In this article, the scope and features of the formation of this measurement are investigated. Other issues related to this measurement will be analyzed by us in the next article. The research methods were analysis and synthesis, grouping method, comparison, analogy method, logical approach, systemic approach. As a result of the research carried out, the article defines the scope of the fair value measurement of inventories and property, plant and equipment in the Russian accounting of organizations that are not budgetary sphere organizations, analyzes the features of the formation of such a measurement of these assets, identifies the most important problematic issues in this area and identifies ways to solve them.

Snowy Ridge Ski Resort: Fair Value Measurement and the Impairment of Long-Term Assets

2010 ◽  
Vol 25 (1) ◽  
pp. 59-70 ◽  
Author(s):  
Richard A. Gore ◽  
Paul J. Herz
Keyword(s):  
Real Estate ◽  
Input Data ◽  
Fair Value ◽  
Measurement Standard ◽  
Ski Resort ◽  
Subsequent Test ◽  
Fair Value Measurement ◽  
Value Measurement

ABSTRACT: The Snowy Ridge Ski Resort case study illustrates the use the new Fair Value Measurement Standard (SFAS No. 157) with various assets in connection with the acquisition of a ski resort and subsequent test for impairment. The case study introduces students to the two primary approaches for measuring fair value (Market and Income). These approaches are then used to compute fair value for a variety of assets. In addition, students become familiar with the Fair Value Hierarchy and classify fair value measures in accordance with the hierarchy. The assets to which the fair value measures are generated include: marketable securities; property, plant, and equipment; real estate under development; and goodwill. The fair values and other input data are then used to test for impairment of the operating assets and goodwill. Thus, the case study illustrates the interplay between fair value measurement and impairment testing in a simple setting to give the student a foundation for understanding how fair value measurement is used in GAAP for operating assets.

The Relevance of the Fair Value Measurement Hierarchy: A Holistic Perspective

2019 ◽  
Author(s):  
Andrei Filip ◽  
Ahmad Hammami ◽  
Zhongwei Huang ◽  
Anne Jeny ◽  
Michel Magnan ◽  
...  
Keyword(s):  
Fair Value ◽  
Holistic Perspective ◽  
Fair Value Measurement ◽  
Value Measurement

The effect of accounting methods on financial reporting quality

2018 ◽  
Vol 60 (6) ◽  
pp. 1401-1411
Author(s):  
Andrain Hadiyanto ◽  
Evita Puspitasari ◽  
Erlane K. Ghani
Keyword(s):  
Financial Reporting ◽  
Palm Oil ◽  
Reporting Quality ◽  
Fair Value ◽  
Financial Information ◽  
Financial Reporting Quality ◽  
Content Type ◽  
Historical Cost ◽  
Fair Value Measurement ◽  
Value Measurement

Purpose This study aims to examine the relationship between accounting measurement method of biological asset and financial reporting quality. Specifically, this study examines whether using fair value method or the historical cost method on biological asset provides different financial reporting quality. Design/methodology/approach This study uses data from 38 agricultural companies that are members of the Roundtable on Sustainable Palm Oil. The annual reports of 38 companies from the Palm Oil Growers over a five-year period starting from 2011 to 2014 are analysed. Findings This study shows that companies using historical cost measurement produce less reliable and less relevant information compared to the companies that are using fair value measurement. Research limitations/implications The results in this study imply that the use of fair value measurement improves the quality of financial information. Practical implications This study supports IASB’s justification of developing IAS 41 as the principle-based standard that better represents the financial information related to biological asset and subsequently lead to good accountability and harmonisation practices. Originality/value This study provides evidence on the best measurement to be used in agriculture activities using a larger sample size of few countries. In addition, this study contributes to the existing literature on the effect of accounting methods on financial reporting quality.

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