scholarly journals Fair Value Accounting: Current Status And A Proposal For Convergence

2011 ◽  
Vol 10 (4) ◽  
pp. 17 ◽  
Author(s):  
Catherine Baluch ◽  
Reuben Cohen ◽  
Henry Soto ◽  
Pamela Tucker ◽  
Ara Volkan ◽  
...  
Keyword(s):  
Global Convergence ◽  
Accounting Standards ◽  
Fair Value ◽  
International Standards ◽  
Current Status ◽  
Fair Value Accounting ◽  
Financial Condition ◽  
Economic Reality ◽  
The U.S ◽  
Complex Subject

Accounting for fair values is a complex subject full of controversial recognition, measurement, and reporting rules. This paper first analyzes the current status of fair value accounting, highlighting the criticisms of the current fair value accounting standards. Next, the U.S. and international standards are discussed to highlight the areas where they differ. Finally, an accounting approach for fair values is proposed that reports the economic reality and the financial condition of a firm and may be used to achieve global convergence.

scholarly journals Valuation Implications of FAS 159 Reported Gains and Losses From Fair Value Accounting for Liabilities

2021 ◽  
pp. 0148558X2110178
Author(s):  
Sung Gon Chung ◽  
Cheol Lee ◽  
Gerald J. Lobo ◽  
Kevin Ow Yong
Keyword(s):  
Stock Returns ◽  
Accounting Standards ◽  
Institutional Ownership ◽  
Fair Value ◽  
Negative Association ◽  
Financial Accounting ◽  
Fair Value Accounting ◽  
Economic Implications ◽  
Current Period ◽  
Gains And Losses

This study examines the economic implications of fair value liability gains and losses arising from the adoption of Statement of Financial Accounting Standards No. 159 (hereafter, FAS 159). We find a positive correspondence between a firm’s FAS 159 fair value liability gains and losses and current period stock returns, consistent with the notion that these gains and losses are priced by equity investors. However, further analysis indicates that fair value gains and losses from liabilities have a statistically significant negative association with future returns, suggesting that investors misprice this earnings component and subsequently correct the mispricing. We also find that the negative association for fair value gains is stronger for firms with lower levels of institutional ownership.

Unreliable Accounts: How Regulators Fabricate Conceptual Narratives to Diffuse Criticism

2021 ◽  
Vol 0 (0) ◽  
Author(s):  
Karthik Ramanna
Keyword(s):  
Fair Value ◽  
Fair Value Accounting ◽  
Original Intent ◽  
The U.S

Abstract In 2010, the U.S. accounting rulemaker (FASB) updated its longstanding constitution to eliminate “reliability” as a fundamental accounting property. FASB argued that “reliability” was misunderstood in practice and that this amendment clarified its original intent. Drawing on primary archival resources and field interviews with regulators, I provide evidence that the change also sought to legitimize the rise of fair-value accounting. By eliminating the need for accounting to be “reliable,” the change attempted to neutralize concerns about the subjectivity in fair-value estimates. Such subjectivity can facilitate accounting manipulation, and some fair-value rules can be attributed to lobbying by managers who stand to benefit. The change illustrates “conceptual veiling,” wherein regulators, seeking to diffuse criticism, including suspicions of capture, manufacture costly conceptual narratives for justifying their actions.

scholarly journals Fair Value Accounting: Implementation Challenges Facing Small and Medium-Sized Entities in the Agricultural Sector

2018 ◽  
Vol 8 (4) ◽  
pp. 60
Author(s):  
Joseph Kwasi Agyemang ◽  
Owusu Acheampong ◽  
Wiafe Nti Akenten
Keyword(s):  
Financial Reporting ◽  
Agricultural Sector ◽  
Fair Value ◽  
International Standards ◽  
Reporting Standards ◽  
Fair Value Accounting ◽  
Implementation Challenges ◽  
Financial Reporting Standards ◽  
Regulatory Bodies ◽  
Value Reporting

Nowadays, the relevance of fair value in financial reporting is gaining impetus and recent discussions are moving in the trend of full fair value reporting. Small and medium-sized entities are not ignored in this instance. The move to new reporting standards results in various challenges for different interest groups such as auditors, preparers and regulators. The main objective of the study was to establish the fair value implementation challenges facing SMEs in the agricultural sector with evidence from regulatory bodies in Ghana. The study established that there is lack of methodological relationship between existing local laws and IFRS and absence of involvement of regulatory bodies in financial reporting standards setting. In light of these challenges, the study recommends involvement of regulatory bodies in standard setting and consideration should also be given to local laws when setting international standards.

scholarly journals MENGUPAS PERSOALAN STANDAR AKUNTANSI KEUANGAN - GOODWIL DI BERBAGAI NEGARA : SUATU PENDEKATAN STUDI LITERATUR

2017 ◽  
Vol 2 (2) ◽  
Author(s):  
Deddy Kurniawansyah
Keyword(s):  
Research Method ◽  
Intangible Assets ◽  
Accounting Standards ◽  
Financial Statements ◽  
Fair Value ◽  
Financial Accounting ◽  
International Accounting Standards ◽  
Fair Value Accounting ◽  
Literature Study ◽  
Accounting Standard

This literature study explains and describe the development of the concept of goodwill from the perspective of accounting by observing and describing until the development at this time, discusses differences in accounting standards of goodwill applicable in some countries, and explains the things that contradict the goodwill. This research method used qualitative with literature study. The results of this study are in some countries, the concepts and rules on goodwill accounting have undergone various changes, including international accounting standards issued by the IASC. Initially goodwill is capitalized and amortized over no more than 20 years. But, along with the increasing use of fair value accounting in accounting standards, thetreatment for goodwill also experienced a shift that is eliminated by the amortization method is replaced by doing impairment test to goodwill. The results of this study contribute as add to the treasury of financial accounting literature, especially accounting treatment of goodwill as intangible assets in the financial statements of various countries such as Indonesia, America and the England.Keyword :Goodwiil, Impairment, Financial Accounting Standard

scholarly journals Análisis de los potenciales efectos en el reconocimiento de los activos de las pequeñas empresas de Cúcuta- Colombia por la implementación de la NIIF para Pymes

Respuestas ◽  
2017 ◽  
Vol 22 (2) ◽  
pp. 116
Author(s):  
Eduardo Solano-Becerra
Keyword(s):  
Small Businesses ◽  
Financial Analysis ◽  
Accounting Standards ◽  
International Standards ◽  
Qualitative Description ◽  
Economic Reality

Resumen Antecedentes: Ley 1314 de 2009 en la cual Colombia converge a estándares internacionales de aceptación mundial. Objetivo: El presente artículo realiza una descripción cualitativa de los potenciales efectos que podría generar la implementación de la NIIF para PYMES en relación con los requisitos para el reconocimiento de los activos. Métodos: El trabajo se desarrolló por medio de una metodología descriptiva, orientada a los cambios de la nueva normatividad contable aceptada en Colombia. Se tomó una muestra de 9 pequeñas empresas que mediante una metodología basada en los conceptos y principios de la NIIF para Pymes y se identificaron los elementos del activo que cumplían con la definición y reconocimiento de la misma. Resultados: Los resultados permitieron afirmar que la NIIF para Pymes hace hincapié en la importancia del análisis financiero de los bienes conforme a la realidad económica. Conclusión: Los efectos en cuanto a reconocimiento de los activos de las pequeñas empresas se reflejaron principalmente en el grupo de propiedad planta y equipo, diferidos, intangibles y valorizaciones.Palabras Clave: Activos, Contabilidad, NIIF, Pymes, reconocimiento.AbstractBackground: Law 1314 2009 in which Colombia converges to international standards for worldwide acceptance. Objective: This article is a qualitative description of the potential effects that could lead to the implementation of the IFRS for SMEs in relation to the requirements for the recognition of assets. Methods: The work was developed through a descriptive methodology, oriented to changes in new accounting standards accepted in Colombia. Took a sample of 9 small businesses that identified the elements of the asset that met the definition and recognition of the same using a methodology based on the concepts and principles of the IFRS for SMEs. Results: The results allowed to affirm that the IFRS for SMEs emphasizes the importance of the financial analysis of the goods in accordance with the economic reality. Conclusion: The effects in terms of recognition of the assets of small businesses is mainly reflected in the group of property, plant and equipment, deferred, intangible and revaluation.Keywords: Accounting, IFRS and SMEs, assets, recognition.ResumoAntecedentes: Lei 1.314 de 2009 na qual a Colômbia convergir para os padrões internacionais aceites em todo o mundo. Objetivo: O presente artigo faz uma descrição qualitativa dos efeitos potenciais que poderiam levar à implementação de IFRS para PMEs em relação aos requisitos para reconhecimento de ativos. Métodos: O estudo foi realizado por um mudanças orientadas metodologia descritiva das novas normas de contabilidade aceitos na Colômbia. uma amostra de 9 pequenas empresas foi observado que o uso de uma metodologia baseada nos conceitos e princípios do IFRS para as PME e os ativos que se enquadram na definição e reconhecimento de que foram identificados. Resultados: Os resultados permitiram afirmar que o IFRS para PMEs enfatiza a importância da análise financeira da propriedade de acordo com a realidade econômica. Conclusão: Os efeitos em termos de reconhecimento dos ativos das pequenas empresas são refletidas principalmente no grupo de bens do ativo imobilizado, diferido, intangíveis e apreciações.Palavras-chave: Ativo, contabilidade, IFRS, as PME, reconhecimento.

The localised accounting environment in the implementation of fair value accounting in Indonesia

2022 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Bernadia Linggar Yekti Nugraheni ◽  
Lorne Stewart Cummings ◽  
Alan Kilgore
Keyword(s):  
Emerging Economies ◽  
Accounting Standards ◽  
Fair Value ◽  
Successful Implementation ◽  
Fair Value Accounting ◽  
Structured Interviews ◽  
Content Type ◽  
Emerging Country ◽  
Government Involvement

Purpose This case study aims to investigate the role of actors in the implementation of fair value standards in an emerging country, Indonesia. Design/methodology/approach This study uses semi-structured interviews with important actors within the local accounting profession, standard setting and regulatory environment, to analyse fair value accounting implementation. This study also incorporates information from press releases and newspapers, to provide a more comprehensive picture of fair value implementation. Findings First, professionals undertake routine actions, cultivate interests and strategically navigate their environment during the process of fair value standard implementation. Second, the role of appraisers becomes more prominent during this process. Third, government involvement is significant in ensuring the successful implementation of global accounting standards. Research limitations/implications First, differing localised contexts, including communities and actors, may shape how an emerging country undertakes the diffusion and implementation of global standards, which in turn can also lead to institutional change. Second, government involvement is crucial in supporting the implementation of global accounting standards within emerging economies. Third, implementing market-based measurements within emerging economies characterised by a lack of an active and liquid market may present challenges. Practical implications Third, implementing market-based measurements within emerging economies characterised by a lack of an active and liquid market may present challenges. Originality/value This study applies the concept of Institutional Work within Institutional Theory to explain how fair value standards are implemented within a localised emerging economy characterised by unique actor roles and goal-directed action.

On theoretical engorgement and the myth of fair value accounting in China: a reply

2020 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Kathryn Bewley ◽  
Cameron Graham ◽  
Songlan Peng
Keyword(s):  
Accounting Standards ◽  
Movement Analysis ◽  
Fair Value ◽  
Research Approach ◽  
Fair Value Accounting ◽  
Political Factors ◽  
Content Type ◽  
Accounting Research

PurposeThis article is a reply to “On theoretical engorgement and the myth of fair value accounting in China” Nobes (2019) from the authors of “Adaptability to fair value accounting in an emerging economy: A case study of China's IRFS convergence” (Peng and Bewley, 2010) and “The Winding Road to Fair Value Accounting in China: A Social Movement Analysis” (Bewley et al., 2018).Design/methodology/approachThis article engages directly with the arguments of the criticism.FindingsThis article argues that the author of the commentary misunderstands the purpose, content and findings of both papers. By providing only a narrowly focused technical analysis of the new Chinese accounting standards, the author fails to see that their qualitative research approach reveals important, complex social and political factors at play in China's attempts to adopt modern international accounting principles. The commentary expresses a view that accounting is a neutral technology that needs only to be clearly defined and enumerated to be correctly implemented, whereas this research takes a much broader and deeper perspective. The authors seek to understand how China was able to successfully adopt fair value accounting standards in 2006, whereas an earlier attempt to introduce fair value in 1998 had led to abuse of fair value measurements and the eventual repeal of fair value regulations in 2001.Practical implicationsThis article helps clarify the purpose of qualitative accounting research, the role of theory in such research and the usefulness of theory in describing and explaining empirical case facts related to changes in accounting standards, particularly in an international context.Originality/valueThis article contributes to a better appreciation of qualitative accounting research.

Fair value accounting in the absence of prudence in accounting standards: an illustration with exotic derivatives

2016 ◽  
Vol 46 (2) ◽  
pp. 145-167 ◽  
Author(s):  
Jacinto Marabel-Romo ◽  
Andrés Guiral ◽  
José Luis Crespo-Espert ◽  
José A. Gonzalo ◽  
Doocheol Moon
Keyword(s):  
Accounting Standards ◽  
Fair Value ◽  
Fair Value Accounting

Voluntary adoption of the consolidated financial statement and fair value accounting by italian local governments

2014 ◽  
Vol 26 (2) ◽  
pp. 313-344 ◽  
Author(s):  
Silvia Gardini ◽  
Giuseppe Grossi
Keyword(s):  
Local Governments ◽  
Accounting Standards ◽  
Fair Value ◽  
Financial Statement ◽  
Annual Reports ◽  
International Accounting ◽  
International Accounting Standards ◽  
Fair Value Accounting ◽  
Consolidated Financial Statement ◽  
Voluntary Adoption

The paper focuses on the potential benefits of fair value accounting (FVA) in the public sector and the shift towards the entity theory of consolidation supported by international accounting standards. The analysis of the Italian cases shows neither adjustments of the assets to their fair value, nor any recognition of intangibles other than goodwill in consolidated financial statement (CFS), maintaining the configuration of a municipal corporate group based on historical costs. These findings suggest a lack of focus on FVA by local governments (LGs), which is in contrast with international accounting standards. Using a combination of sources (such as annual reports and interviews), part of this paper is based on multiple-case studies of Italian LGs on the voluntary adoption of CFS.

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