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Fair value range advantages or supporters number four of them?

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تم إضافة السؤال من قبل georgei assi , مدير حسابات , المجموعة السورية
تاريخ النشر: 2014/12/01
georgei assi
من قبل georgei assi , مدير حسابات , المجموعة السورية

1. more effective and efficient decision-making

2. reflect the purchasing power of the income of the remaining

3. does not guarantee the continuation of the project

4. It takes into account the interests of the administration

Mohamed Ezat Mahmoud  Mady
من قبل Mohamed Ezat Mahmoud Mady , Accounting and Financial Manager , Trustmed

agree With Your Mr geogi

MALIIK SOHAIL ABBAS
من قبل MALIIK SOHAIL ABBAS , ACCOUNTS MANAGER , AL RAWDAH GREEN SWEET WATER

AGRRED MR GEAOGI AGGSSI

Ahmed kandil
من قبل Ahmed kandil , Cost Controller , Battour Holding Cpompany

Accurate Valuation

A primary advantage of fair value accounting is that it provides accurate asset and liability valuation on an ongoing basis to users of a company’s reported financial information. When the price of an asset or liability has increased or is expected to increase, the company marks up the value of the asset or liability to its current market price to reflect what it would receive if it sold the asset or would have to pay to relieve itself from the liability. Conversely, the company marks down the value of an asset or liability to reflect any decrease in the market price.

True Income

Fair value accounting limits a company’s ability to potentially manipulate its reported net income. Sometimes management may purposely arrange certain asset sales, for example, to use gains or losses from the sales to increase or decrease net income as reported at its desired time. Using fair value accounting, gains or losses from any price change for an asset or liability are reported in the period in which they occur. While an increase in asset value or a decrease in liability value adds to net income, a decrease in asset value or an increase in liability value reduces net income.

 

Value Reversal

Fair value accounting can also present challenges to companies and users of their reported financial information. Conditions of the markets in which certain assets and liabilities are traded may fluctuate often and even become volatile at times. Applying fair value accounting, companies reevaluate the current value of certain assets and liabilities even in volatile market conditions, potentially creating large swings in the value of those assets and liabilities. However, as markets stabilize, such value changes likely reverse back to their previous normal levels, making any reported losses or gains temporary, which means fair value accounting may have provided misleading information at the time.

Market Effects

The use of fair value accounting may further affect a down market adversely. For example, after an asset has been revalued downward because of drops in the current market trading prices, the lower value of the asset could trigger greater selling of the asset at a potentially even more depressed price. Without valuation markdown as required by fair value accounting, companies may not feel the need to sell an asset in a down market to prevent potentially further downward valuation of the asset. Absent additional selling pressures, the market may stabilize over time, which would help preserve the value of the asset

RAMY ALHASSAN
من قبل RAMY ALHASSAN , Senior accountant , kfupm

thanks for call no more than u say

 

مستخدم محذوف‎
من قبل مستخدم محذوف‎

you ask and answered

thanx sir

Asim Azaldeen Abdalrahman Mhammed
من قبل Asim Azaldeen Abdalrahman Mhammed , Property Manager , TAAM PROPERTY

Thanx my teacher georgie for your answer .. its enough

FITAH MOHAMED
من قبل FITAH MOHAMED , Financial Manager , FUEL AND ENERGY CO for transportion petroleum materials

AGREE WITH YOUR ANSWER SIR  

Salah Othman Yousef Alshambaati
من قبل Salah Othman Yousef Alshambaati , مدير ادارة الحسابات , شركة انفال الجديدة للتجارة والمقاولات

Agreed with the answer, Mr. George

Tanveer Qureshi
من قبل Tanveer Qureshi , Director , Qureshi Associates

Agreed with Mr. Assi.