Comparison among Fair Value and Historical Value

August 2022 | 5 pages | ID: C140026DA742EN
Sadia Saeed

Abstracts

Financial reporting is considered one of most important tools and techniques for managing several operations of the company. A company uses diverse rules and regulation for making financial reports as per nature and environment of the country. Some companies use International Financial Reporting Standards while other uses Generally Accepted Accounting Principles. Different standards are followed in different regulations. According to International Financial Reporting Standards, the companies are required to use fair value of assets (ESMA, 2013). They must use fair value of assets and properties while making financial statements of the company. According Generally Accepted Accounting Principles, the companies are required to use historical costs of assets for making financial reports of the company. Generally Accepted Accounting Principles are basically uses in United States. International Financial Reporting Standards are followed in different parts of the world as per requirements. The approach of revising the valuation of properties and assets on. continued (wordcount of report: 1500 words)

Contents

Introduction
Fair Value Accounting Vs Historical Cost Accounting
Impacts on statement of financial position
Effects on Statement of profit and Loss
Effects of statement of cash flows
Impact of Fair value and historical value on decision making process
Conclusion
References