In light of these conditions, there is no time like the present to quicker execute more guidelines for fair v
论文范文http://www.chuibin.com/ alue measurements instead of keep standing at the step of “moving forward”.
Robert H. Herz, chairman of the Financial Accounting Standards Board has strong opinions about what is wrong with accounting and financial reporting in the United States. “Accounting has historically not defined income as change in wealth, or change in net worth or value,” he explains.“It has defined it by thousands and thousands of conventions that measure allocations of historical costs.” In other words, accounting hasn't really defined income.” These “pure accounting fantasies,” herz declares, have helped create“a basic schism in u.S. industry" between company management and investors. He believes cFOs and cEOs--and current 3accounting methods focus on meeting annual budgets and reporting those financial metrics that they control and for which they are held accountable.
Is there anything wrong with that practice? Unfortunately, that is a very imperfect application for people who invest in companies. investors also want to know what the impacts of external events on companies’ value are. Without doubt, the concept of fair value is far from problem-free. While any accounting board has long believed in fair value, years will pass before that belief becomes practice. as long as they have a strong advocate of fair value at its helm, it is high time the process was accelerated.
4. relevance and Reliability
Is fair value relevant? in today's dynamic and volatile markets, whether it is to buy or sell, what people want to know is what an asset is worth today. Fair value measurements provide more transparency than historical cost based measurements. Maybe, if companies had measured all financial instruments at fair value, regulators, shareholder, and investors could have achieved greater regulatory and market discipline and avoided some of the losses that investors and taxpayers have had to pay during previous downturns in the economy.
Accountants presently use a wide array of accrual and deferral methods in preparing financial statements. Those methods are essentially mathematical calculation even to a minute cent to get the precision. Nevertheless, robert r. Sterling notes: accountants who continue to seek more precision are to be admired and encouraged. However, those who seek absolute precision might be instructed by considering what has been learned in the so-called “exact” sciences. Einstein…drew a sharp and clear distinction between the certainty of calculation and the uncertainty of representations of phenomena: “As far as the laws of mathematics refer to reality, they are not certain; and as far as they are certain, they do not refer to reality.” The same is true for accounting: as far as mathematical methods used in accounting refer to reality,
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