CORPORATE ACCOUNTING

Corporate Accounting



Corporate Accounting

Concept of fair value

The IFRS have ERest in 2011 a standard for determining the fair value (fair value) issued (IFRS 13), currently going through the Endorsement process the EU and should find application in 2013. In the U.S. GAAP with the 15September 2006 SFAS 157 published a single standard has been created that includes improved guidelines for the evaluation of assets and liabilities at fair value. SFAS 157 does not use a new opportunities to apply the fair value method, but applies whenever other standards require the valuation at fair value or permit. The IASB defines fair value as the amount by many standards, between knowledgeable, willing and independent business partners could (on commercial terms) an asset (asset) exchanged or a liability (liability) are settled. 

When fair value is therefore a market-oriented, but fictitious value scale that does not constitute an independent and unified concept of value, rather, for the determination to use other valuation approaches. For the determination of fair value, the IASB favors the expression of the fair value as exit price. Assets are valued accordingly with their exit prices and debt with their release amounts. The principle of going concern (going concern) to F.23 and IAS 1.25 remains as a basic assumption of the IFRS accounting unaffected by this provision. The exit price is therefore not to be seen in terms of actual or fictitious company going, but to interpret it as standalone selling price resulting from a market transaction between unrelated third parties. The fair value is therefore strictly on value in use to distinguish (value in use).

Objectives of the fair value accounting

The aim of the re-orientation of international accounting is to assets and liabilities of a fair value accounting to review as soon as possible, since the resultant fair value information more relevant is attributed. Than those arising from acquisition or production costs (APC) The annual financial statements to support due to the presentation of fair value of both current and future capital and other coalition partners in deciding whether an engagement is considered to be advantageous (decision usefulness). For users of the financial statements, the fair value therefore viewed as more meaningful indicator of future success, and as a useful basis for assessing future cash flows. The concept of fair value sets based on the assumption that a market value meets important requirements: first, to the fair value to be observable and thus create an objective basis for recognizing, on the other hand is his interpretation represented as proceeds a realistic alternative course of action for the company.

Determination of fair value

The concept of fair value is based on the determination of a hypothetical market price and a market price-based investigation. If there is a claim of the fair value definition sufficient market price, this is preferable, given its greater objectivity fundamentally different calculation methods. Because the fair value cannot always be read directly from the market, the determination was based on a three-tier fair value hierarchy, which is characterized by decreasing objectivity and reliability. In different standards can also be found an objective threshold (reliability exception), and ...