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Essay / Research Paper Abstract
This 5 page paper looks at the way that the 2008/9 global financial crisis may impact on the global harmonization of international accounting standard concerning fair value accounting practices. The bibliography cites 5 sources.
Page Count:
5 pages (~225 words per page)
File: TS14_TEiasccfv.rtf
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Unformatted sample text from the term paper:
aiding investors and stakeholders by providing a unified approach to accounting. The recent credit crunch and global recession that has resulted from the conditions in the financial sector have drawn
attention to several areas of international accounting standards and the impact they have on reporting entities. One area that has become controversial is that of the way fair value is
determined. The international standards have had an approach where there needs to be the determination of a fair market value. It may be argued that some aspects of fair
value were controversial prior to the credit crunch due to the impact that the new rules, measuring at fair market value, could have on the accounts, the causes of the
potential volatility are argued as being potentially worse in the financial crisis conditions. Fair value is seen in may accounting standards including IAS 19, IAS 36, IAS 38, IAS
39, IAS 40, IAS 41, IFRS 2 and IFRS 3 concerning the valuation of different assets groups. Fair value can be defined as "the value is one that willing parties
would agree to if the transaction was at arms length"1. This is the general concept that is carried through all of the standards, but is further defined in individual standards.
.The concept of fair value became an issue that would have potentially far reaching implications and not always fulfil the usual ideas
of what is and is it fair in accounts. The benefit of this and why it is called fair value is that it gives the fair value using market value
at the point of the accounts. This is the value that would be gained if the assets were to be sold that day.
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