scholarly journals Fair value accounting volgens de IASB en Limperg

2005 ◽  
Vol 79 (4) ◽  
pp. 125-131
Author(s):  
Henk Langendijk
Keyword(s):  
Accounting Standards ◽  
Fair Value ◽  
Financial Accounting ◽  
Fair Value Accounting ◽  
Zeer Veel

Fair value is een belangrijk waardebegrip wat in zeer veel International Financial Accounting Standards (IFRS) is opgenomen, waarbij in bepaalde gevallen ook de ongerealiseerde waardestijgingen in de winst- en verliesrekening worden opgenomen. Limperg zag fair value (= de directe en indirecte opbrengstwaarde) niet als een waardebegrip op de voorgrond maar op de achtergrond. Waardering tegen vervangingswaarde had voor hem het primaat. Toch kan ook volgens Limperg fair value wel worden toegepast. Hierbij moet worden gedacht aan impairments van materiële vaste activa (in zijn taalgebruik extra-afschrijvingen) en waardering van vaste activa die worden aangehouden voor de verkoop (en dus niet meer dienstbaar aan de productie). Voorts is fair value voor hem ook mogelijk als waarderingsgrondslag bij zelfstandige vruchtdragers (effecten en woonhuizen), indien deze fair value gelijk is aan de vervangingswaarde. Het direct verantwoorden van de ongerealiseerde waardestijgingen van zelfstandige vruchtdragers ging hem te ver. Deze stijgingen moeten volgens hem op een herwaarderingsreserve worden geboekt. Dit is een belangrijk verschil met de IFRSs waarbij voor bepaalde effecten en voor vastgoedbeleggingen – mits als waarderingsgrondslag voor fair value is gekozen – directe verantwoording van ongerealiseerde waardestijgingen in de winst- en verliesrekening is voorgeschreven.

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.

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 An Evaluation Of The Implementation Of Fair Value Accounting: Impact On Financial Reporting

2011 ◽  
Vol 9 (1) ◽  
Author(s):  
Karen T. Cascini ◽  
Alan DelFavero
Keyword(s):  
Financial Reporting ◽  
Accounting Standards ◽  
Fair Value ◽  
The United States ◽  
Financial Accounting ◽  
Financial Assets ◽  
Financial Accounting Standards Board ◽  
Continuous Change ◽  
Fair Value Accounting ◽  
The Cost

<p class="MsoNormal" style="text-justify: inter-ideograph; text-align: justify; margin: 0in 0.5in 0pt; mso-pagination: none;"><span style="color: #0d0d0d; font-size: 10pt; mso-themecolor: text1; mso-themetint: 242;"><span style="font-family: Times New Roman;">The accounting industry is in a state of continuous change.<span style="mso-spacerun: yes;">&nbsp; </span>In the United States, the historical cost principle has traditionally been the foundation of accounting.<span style="mso-spacerun: yes;">&nbsp; </span>Until recently, assets and liabilities have been required to be recorded at their acquisition prices, with the exception of designated financial assets and financial liabilities.<span style="mso-spacerun: yes;">&nbsp; </span>However, the Financial Accounting Standards Board (FASB) has now created accounting standards that are distant from the cost principle.<span style="mso-spacerun: yes;">&nbsp; </span>Statement of Financial Accounting Standards No. 157: Fair Value Measurements, issued in September 2006 (FAS157, now codified as ASC 820) and Statement of Financial Accounting Standards No. 159: The Fair Value Option for Financial Assets and Financial Liabilities, created in February 2007 (FAS159, now ASC 825-10-25), significantly increases the viability of fair value accounting. The purpose of this paper is to illustrate the benefits and pitfalls of fair value and the corresponding affects on various stakeholders. <span style="mso-spacerun: yes;">&nbsp;&nbsp;</span></span></span></p>

Fair Value Accounting for Property-Liability Insurers and Classification Decisions under FAS 115

1998 ◽  
Vol 13 (3) ◽  
pp. 207-239 ◽  
Author(s):  
Norman Godwin ◽  
Kathy Petroni ◽  
James Wahlen
Keyword(s):  
Liquidity Risk ◽  
Accounting Standards ◽  
Fair Value ◽  
Financial Accounting ◽  
The Other ◽  
Fair Value Accounting ◽  
Historical Cost ◽  
Accounting Numbers ◽  
Sample Property ◽  
Important Objective

The first objective of this study is to describe the substantial differences across property-liability insurers in accounting classification decisions for fixed maturity securities during 1991–1995. This period includes the years before adoption, upon initial adoption, and after adoption of Statement of Financial Accounting Standards No. 115 (FAS 115, “Accounting for Certain Investments in Debt and Equity Securities”). The second and more important objective of this study is to test two risk-based explanations for differences in investment classification decisions under FAS 115. Under this new standard, firms are required to classify fixed maturity investment securities into trading portfolios, available-for-sale portfolios, or held-to-maturity portfolios. These classification decisions determine whether these securities are recognized at fair value or historical cost. On one hand, the decision to classify securities as available-for-sale rather than held-to-maturity (and thus apply fair value accounting) increases the time-series volatility of key accounting numbers such as owners' equity and total assets, which may be costly for insurers with low tolerance for accounting volatility. On the other hand, the choice to classify securities as available-for-sale (and thus apply fair value accounting) reduces liquidity risk because the accounting standards (and SEC enforcement practices) limit management's ability to sell securities that are not recognized at fair value. The empirical analyses examine whether the security classification decisions of the sample property-liability insurers are associated with firm specific characteristics that reflect liquidity risk and the tolerance for accounting volatility. The findings show that managers of property-liability insurers make tradeoffs between liquidity risk and concerns about accounting volatility when making investment classification decisions under FAS 115.

scholarly journals Fair Value Accounting Fact Or Fancy?

2010 ◽  
Vol 8 (11) ◽  
Author(s):  
Andrew Wagner ◽  
Don Garner
Keyword(s):  
A Priori ◽  
Accounting Standards ◽  
Fair Value ◽  
Feedback Mechanism ◽  
Securities And Exchange Commission ◽  
Capital Adequacy ◽  
Financial Accounting ◽  
Current Guideline ◽  
Fair Value Accounting ◽  
Negative Feedback Mechanism

Accounting methods had used historical costs prior to FAS 115 and FAS 157. For financial intermediaries in particular, fair value accounting (FVA) has replaced verifiable historical costs with market valuations that, for illiquid assets, rely on assumptions and are not a priori verifiable. The effect of using these relatively new financial accounting standards has been to convert the valuation basis from historical costs accounting to fair value accounting. The recent literature seems to indicate that the current guideline about fair value accounting may be appropriate in certain cases; but in many cases, it does not appear so. Nevertheless, the Financial Accounting Standards Board (FASB) and the Securities and Exchange Commission (SEC) are, apparently, maintaining their current directives for accounting valuation. The Enron case clearly showed that FVA aided the firm in misstating income statements and balance sheets. Given the accounting literature on the subject, the use of FVA also appears to have contributed to the liquidity crisis of 2008 in a negative way in that (1) the use of FVA combined with mandatory capital adequacy requirement introduced a negative feedback mechanism which caused asset prices to fall more than they otherwise would have, and (2) the use of FVA seems to have caused a lack of confidence in valuations reported on banks’ financial reports. This paper will examine the problems inherent in the replacement of historical cost accounting with fair value accounting, with particular focus on the veracity and verifiability of FVA numbers. Our result indicates that accounting methods cannot possibly be responsible for various valuation models, particularly with respect to certain derivative contracts, such as energy swaps and credit default swaps which cannot be replicated in practice.

scholarly journals Fair Value Accounting: Affect On The Auditing Profession

2010 ◽  
Vol 26 (3) ◽  
Author(s):  
Danny Pannese ◽  
Alan DelFavero
Keyword(s):  
Multinational Corporations ◽  
Financial Reporting ◽  
Accounting Standards ◽  
Fair Value ◽  
Financial Accounting ◽  
Credit Crisis ◽  
Fair Value Accounting ◽  
Financial Reporting Standards ◽  
Business Entities ◽  
Recent Financial Crisis

<p class="MsoNormal" style="text-align: justify; line-height: normal; margin: 0in 0.5in 0pt;"><span style="font-family: &quot;Times New Roman&quot;,&quot;serif&quot;; color: black; font-size: 10pt; mso-themecolor: text1;">During this period of global markets, multinational corporations are demanding financial accounting standards with enhanced uniformity. In an effort to achieve this objective, the Financial Accounting Standards Board (FASB) and the International Accounting Standards Board (IASB) have been working together on the Convergence Project, aiming to develop accounting standards that closely correlate with international financial reporting standards.<span style="mso-spacerun: yes;">&nbsp; </span>In September 2006 and February 2007, the FASB issued two key fair value accounting (FVA) standards which focused on providing guidelines for fair value measurement (through a classification hierarchy), expanding disclosure requirements, and also allowing business entities to increase FVA&rsquo;s application.<span style="mso-spacerun: yes;">&nbsp; </span>However, the recent financial crisis has placed increased scrutiny on estimates derived under FVA.<span style="mso-spacerun: yes;">&nbsp; </span>Consequently, a spotlight has been placed on the auditing profession, as the effectiveness of an auditor&rsquo;s ability to test estimates derived under FVA has been questioned due to numerous firms approaching collapse in the midst of the credit crisis. <span style="mso-spacerun: yes;">&nbsp;</span>Thus, the purpose of this paper is to present the challenges auditors face when auditing FV estimates, and to discuss the profession&rsquo;s capability of adapting to FVA in the future.<span style="mso-spacerun: yes;">&nbsp; </span></span></p>

scholarly journals Fair-value-accounting, inactieve markten en procycliciteit

2010 ◽  
Vol 84 (1) ◽  
pp. 7-26
Author(s):  
Bert-Jan Bout ◽  
Ralph Ter Hoeven ◽  
Henk Langendijk
Keyword(s):  
Best Practices ◽  
Accounting Standards ◽  
Fair Value ◽  
Financial Accounting ◽  
Advisory Panel ◽  
International Accounting Standards ◽  
Financial Accounting Standards Board ◽  
Fair Value Accounting ◽  
Expert Advisory ◽  
Mate Waarin

In deze bijdrage besteden wij aandacht aan de gevolgen van inactiviteit van de markten voor de wijze waarop de fair value van financiële instrumenten wordt bepaald. De bestaande IFRS hieromtrent en de aanvullende guidance van de door de Financial Accounting Standards Board (FASB) en International Accounting Standards Board (IASB) opgerichte Expert Advisory Panel (EAP) worden in dit kader behandeld. Tevens bespreken wij de vermeende procyclische werking van waardering tegen fair value aan de hand van een aantal onderzoeksrapporten die nader ingaan op de achtergronden en oorzaken van de invloed van fair-value-accounting (FVA) op het financiële systeem. In een jaarrekeningonderzoek onder alle banken en verzekeraars binnen de ‘FTSE Eurofirst 300’-index, wordt nagegaan in hoeverre de financiële activa en financiële verplichtingen op fair value zijn gewaardeerd; de gevoeligheid voor fair-value-veranderingen wordt daarbij op netto-basis beoordeeld. Daarnaast is onderzocht of er een verband bestaat tussen de grootte van een bank en de mate waarin financiële activa en financiële verplichtingen op fair value zijn gewaardeerd. Ook wordt onderzocht, aan de hand van de fair-value-hiërarchie, in hoeverre marktinactiviteit invloed heeft gehad op de wijze waarop de financiële instrumenten zijn gewaardeerd. Tevens geven wij enkele best practices op een aantal toelichtingsgebieden. Het artikel sluiten wij af met een nabeschouwing.

Factors influencing non-compliance with ASU 2010-06 in the banking industry

2014 ◽  
Vol 29 (6) ◽  
pp. 548-574 ◽  
Author(s):  
Hung-Yuan (Richard) Lu ◽  
Vivek Mande
Keyword(s):  
Accounting Standards ◽  
Fair Value ◽  
Internal Controls ◽  
Financial Accounting ◽  
Fair Value Accounting ◽  
Content Type ◽  
Accounting Rules ◽  
Specific Factors ◽  
Value Hierarchy ◽  
Practical Implications

Purpose – This study aims to examine whether banks are compliant with the Financial Accounting Standards Board’s standard Accounting Standards Update (ASU) 2010-06 requiring disaggregated fair value hierarchy information. It also identifies institutional and firm-specific factors that are associated with compliance or non-compliance. Design/methodology/approach – Using quarterly reports of banks for the first quarters of 2009 (pre- ASU 2010-06) and 2010 (post- ASU 2010-06), we hand-collect information on disclosures about fair values from the footnotes. Using a logistic regression with compliance/non-compliance as the dependent variable, we examine factors associated with compliance/non-compliance. Findings – Results show that 23 per cent of banks do not comply with ASU 2010-06 and that the non-compliant banks tend to be small, lack effective internal controls and are more likely to be audited by non-specialist auditors. Research limitations/implications – This study only considers one type of non-compliance with ASU 2010-06, i.e. whether or not firms provide disaggregated fair value hierarchy information. There may be other forms of non-compliance that the authors do not examine because of the difficulties involved in objectively defining non-compliance. Practical implications – The findings suggest firms may need to increase training for internal personnel and hire high-quality auditors for ensuring compliance with fair value accounting rules. The authors also suggest that smaller firms may find compliance to be onerous and recommend additional research to examine whether smaller firms should be exempted from some or all of the fair value rules. Originality/value – This study provides some of the first evidence on the level of compliance with mandated fair value disclosures.

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