Fair Value Essay Example | Topics and Well Written Essays - 1250 words

light Value - Essay ExampleThus, the AASB framework provides the general guidelines, establishing the way a company should measure completely its assets. The aim of the act is to avoid inconsistency of the various methods of measuring fair judge, providing a to a greater extent blind drunk framework, for all companies. Thus, the market value of any current asset will be measured by the replacement cost of the services or benefits currently embodied in the asset.One very repugn and problematic point concerned the market value of different assets that werent commonly traded on the open market, such as buildings or other possessions of this nature. The conclusion reached by the AASB researchers and specialists was that the stovepipe way to measure the market value of such assets would be by comparing the selling-prices of other buildings in the area. Although controversial at first, this rule was, seemingly, the best one to follow in establishing the potential selling price of an y asset held by a company.The concepts of current assets and current liabilities are also defined by AASB, as being an asset that is pass judgment to mature or be realized within a 12 month period, part current liabilities are those liabilities that are expected to be paid, settled or extinguished within a period equal to or less than 12 months from the reporting date.FASB and IASB dialog box members met on twelfth of May, 2006 to discuss and establish the revenue recognition methods that should be used. In doing so, there were some factors that had to be adjudge as important to the recognition of any revenue. First on the list was client acceptance, which lead, after complete(a) examination and in-depth discussions, to the conclusion thatRevenue shall be recognized if the customer must accept performance to date. That is, the contracts lawful remedy for breach is, or is like, specific performance or in the event of customer cancellation, the customer is obligated to pay damag es reflecting performance to date. (see http//www.fasb.org/board_meeting_minutes/04-27-06_rr.pdf)Were hoping that there will be more consistency in the way companies approach fair value measurement, and less diversity in practice from the users perspective. Users should have more confidence that when they look at those disclosures about what is being shown at fair value and the methods used, theyll have erupt information to use to assess the quality of earnings and how they view the reliability of the estimates being made., stated FASB board member, Leslie F. Seidman (Glenn Cheney, FASB standard clarifies fair value measurement, 16 Oct, 2006,). From this point of view, the AASB framework provides rigorous guidelines, avoiding misunderstanding and inconsistency. Still, as all regulations were changed and revised, many companies complain that they have a difficult time in applying them, and that many criteria provided by this statement have been so frequently changed and discussed th at the danger of misinterpreting or failing to respect the newest changes is real and unattainable to ignore.Given the fact that the market value is mainly based