Fair Value Measurement

Running head: FAIR VALUE MEASUREMENT
FAIR VALUE MEASUREMENT

FAIR VALUE MEASUREMENT 2
Table of contents
Task Two: Financial instruments and performance reporting.........................................................3
Task Four: Prepare and Reconcile Variable Costing Statements....................................................4
References........................................................................................................................................6

FAIR VALUE MEASUREMENT 3
Task Two: Financial instruments and performance reporting
As stated in the article by Horton, J & Macve, R 2000, ‘“Fair value” for financial instruments:
how erasing theory is leading to unworkable global accounting standards for performance
reporting’, Australian Accounting Review, vol. 10, no. 21, May, pp. 26–39 it has been reported
by the authors that fair value measurement under the IFRS and principles of IAS faced various
problem. The author state that current the International Accounting Standards setting board are
facing problems as there are political as well as economic debate over the e pricings of
international stock exchange (Bens, Cheng & Neamtiu, 2015). The Author wants to show that
currently IASC is pursuing for proposals under the action of accounting for financial
instruments. The author states that the conceptual framework introduced by the IASC is a
complete flawed and unworkable practice for fair accounting valuation of financial instruments.
The trend of fair value account that will be adopted by the IASB is critical criticized by the
author by stating that adoption is result of trend setter for a long term theory based approach with
theoretical assumptions and practice having no real relationship to the practical accounting
environment (Bratten, Causholli & Khan, 2016). The author has criticized the fair value accounts
will be mere of accounts of financial instruments current value that we derived from deprival
value that was restated under the Accounting Theory Monograph 10. The author has in this
journal tried to criticized the accounting standards set under the IASB and FASB to be a
completely flawed and unworkable process. According to these accounting standards, fair Value
is the value at which the assets are to be sold or purchased. In this sense, the author heavily
criticized the definition set out by the standard setter regarding the fair value. The author feels
that selling and purchasing price of the financial instrument or asset depends of the price maker
and price takers. It is the demand of the buyer and seller to set the selling and purchasing price of
the financial instrument hence there is no accountability of predictions that can be made under
the flawed accounting standards set by FASB and IASB (Durocher & Gendron, 2014). The
author states that in the case of monopoly there will be standards set for fair value of financial
instrument will not stand because the selling price will rest in the hand of the owners. In this case
the author has criticized the approach of standards setting to be fundamental and theory based