2010—Pages 93–118 Did Fair-Value Accounting Contribute to the Financial Crisis? Christian Laux and Christian Leuz I n its pure form‚ fair-value accounting involves reporting assets and liabilities on the balance sheet at fair value and recognizing changes in fair value as gains and losses in the income statement. When market prices are used to determine fair value‚ fair-value accounting is also called mark-to-market accounting. Some critics argue that fair-value accounting exacerbated the
Premium Balance sheet
Book value: The book value of ordinary share is the net worth of a corporation less the par value of preference shares outstanding divided by the number of ordinary shares outstanding. Suppose the net worth of a company contains the following information viz; Preference shares (Rs. 100 per share): 1000000.00 Ordinary share (Rs.5 per share): 1500000.00 Share premium:
Premium Stock market Stock Finance
Financial Accounting Easy: 1. Which of the following is usually considered cash? a. Certificate of deposit b. Checking account c. Money market saving certificate d. Postulated Check 2. In preparing the August 31‚ 2011 bank reconciliation‚ Apex Company provided the ff. information Balance per bank statement 1‚805‚000 Deposit in transit 325‚000 Return of customer’s check for 60‚000 Insufficient fund Outstanding checks 275‚000 Bank service change
Premium Balance sheet Generally Accepted Accounting Principles
Present value of face amount = $1‚000‚000*0.37689 = 376‚890 Present value of interest payments = $60‚000*12.46221 = 747‚733 Total price of bonds at issuance = 1‚124‚623 Face amount discount factor from PV of $1‚ n = 20‚ i = 5% Interest payment amounts = $1‚000‚000*12%*1/2 = $60‚000 Interest payment discount factor from PV of Ordinary Annuity‚ n = 20‚ i = 5% 2) Prepare the journal entry necessary to record the issuance of the bonds. Dr. Cash 1‚124‚623 Cr. Premium on bonds
Premium Generally Accepted Accounting Principles Payment Money
Abstract This paper is written for the accounting theory course as a course project. This paper discusses the differences between the historical cost accounting approach and the fair value accounting approach. The discussion will focus on the debate on using which accounting approach. We begin by stating the definitions of both concepts and discussing them thoroughly‚ then we state the main advantages of the two approaches followed by comparison between them. The last section of this paper discusses
Premium Balance sheet Generally Accepted Accounting Principles Asset
IFRS 13 Fair Value Measurement applies to IFRSs that require or permit fair value measurements or disclosures and provides a single IFRS framework for measuring fair value and requires disclosures about fair value measurement. The Standard defines fair value on the basis of an ’exit price’ notion and uses a ’fair value hierarchy’‚ which results in a market-based‚ rather than entity-specific‚ measurement. IFRS 13 was originally issued in May 2011 and applies to annual periods beginning on or after
Premium Balance sheet Asset Measurement
Calculating correlation values for categorical data In order to find the correlation values for the fields in our data set‚ The Pearson Correlation Coefficient was used. This requires that the data in both fields be quantitative. But what if we were looking to calculate the correlation on two given fields that were say‚ numerical and categorical‚ or even both categorical. The Point Biserial coefficient is a special case of The Pearson Correlation Coefficient; it is a branch of PCC although they
Premium Pearson product-moment correlation coefficient Spearman's rank correlation coefficient Correlation and dependence
Customer Value Proposition in Value Markets Business houses that are our customers are under constant pressure to cut down their cost. With this concern at the back of their mind‚ out of the sales pitch‚ they mainly concentrate on the price quoted to them. In such cases‚ the supplier needs to demonstrate the core value offerings/ benefits with extra vigor to persuade the customer to make the purchase. Marketing managers tend to neglect the real contribution of value propositions to superior business
Premium Marketing Management Target market
1000108 Open Access A Fair Value and Hedge Activities Doan Van Dinh1* and Guangming Gong2 1 2 College of Economics and Trade Management of Hunan University‚ China and Faculty of Finance and Banking of the Industrial University of Ho Chi Minh City‚ Vietnam Business school Hunan University in China Abstract This article‚ author consider the fair value of financial instruments whether it is appropriate for economic development and the volatility of the stock market or not through investors’
Premium Balance sheet Financial statements Asset
What is Fair Value Accounting? An alternative approach to measurement that seeks to capture changes in asset and liability values over time. The International Accounting Standards Board (IASB) defines fair value as "... an amount at which an asset could be exchanged between knowledgeable and willing parties in an arms length transaction". Under the fair value measurement approach‚ assets and liabilities are re-measured periodically to reflect changes in their value‚ with the resulting change impacting
Premium Asset Financial markets