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Assignment Advance Financial Accounting

   

Added on  2020-04-01

7 Pages1204 Words78 Views
Running head: ADVANCE FINANCIAL ACCOUNTINGADVANCE FINANCIAL ACCOUNTINGName of Student:Name of University:Author Note:

1ADVANCE FINANCIAL ACCOUNTINGTABLE OF CONTENTINTRODUCTION......................................................................................................................2CONCEPT:................................................................................................................................2ASSUMPTIONS:.......................................................................................................................3CONCLUSION..........................................................................................................................5REFERENCE.............................................................................................................................6

2ADVANCE FINANCIAL ACCOUNTINGINTRODUCTIONIn order to derive the picture of overall financial performance of a company at certainpoint of time, the financial report plays pivotal role. The existence of financial report furtherdepends on the process of financial accounting. One of the accounting techniques involvesassessing asset and liabilities at current market price termed as fair value measurement. Thisis essential to be followed in order to bring forth authentic financial report of a company.However International finance reporting Standard 13 introduces a revised version of fairvalue accounting (Dvořáková 2013). This report aims to discuss the concept of new fair valueaccounting process along with highlighting the underlying assumptions of the IFRS 13 FairValue Measurement.CONCEPT:IFRS 13 is the revised form of the guideline for setting framework of fair valuemeasurement with required disclosure. As per the definition, fair value of asset or liabilityrefers to certain price operative in the market at the day measurement is undertaken. Thisprice is the amount seller of an asset receives or makes payment while transferring anyliabilities between market agents. The assumption inherently integrated when conducting thefair value measurement is the assumption about risk.The motive behind IFRS 13 is to make fair value accounting more consistent andcompatible. IFRS 13 makes fair value measurements more consistent and comparablethrough the execution following a hierarchy of fair value (Henderson et al. 2015). In thehierarchy categorisation of the inputs used in valuation techniques are done. The inputs areorganised in three levels. Prices quoted in the current markets of assets or liabilities, which

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