Fair Market Value Accounting

Traditional equity allocation models often rely on static ownership structures, which become outdated as member contributions evolve. The Build Dynamic Model introduces a transformative, blockchain-based framework that integrates Fair Market Value (FMV) assessments and API-driven automation to realign equity in real time. By leveraging smart contracts, tokenized shares, and structured protocols for evaluating diverse contributionsincluding time, intellectual property, and capital-this model ensures fairness, transparency, and adaptability across collaborative environments. The study explores the theoretical foundations, technological enablers, and practical implications of this model in the context of startups, decentralized organizations, and multidisciplinary ventures. Findings suggest that dynamic equity distribution mechanisms significantly reduce team conflict, improve incentive alignment, and foster sustainable collaboration. The paper concludes by recommending policy, legal, and technical considerations for broader adoption.

This study is the first that investigates the value relevance of SFAS 71 within the banking sector, especially relating to the role of the new accounting standards in reducing the problem of information asymmetry due to bank asset opacity. Using samples consisting of 41 listed banking firms from 2016 to 2020, this study shows that the empirical relationship between the initial implementation of SFAS 71 and bank equity value is inverse U-shaped or concave and that bank size has a negative moderated effect on the relationship between the initial implementation of SFAS 71 and bank equity value. These findings indicate that: (i) at low levels of retained earnings adjustments due to the initial implementation of SFAS 71, the disclosure effect brought by the new accounting standards has a positive relationship with bank equity valuation, (ii) at higher levels of adjustments beyond those previously anticipated by capital market investors, the substantial effect of the new accounting standards has a negative relationship with bank equity valuation, and (iii) larger banks have more opaque assets and therefore suffer more significant valuation discounts due to the substance effect.

The purposes of this study are twofold. First, we draw from the findings of prior literature reviews and theoretical studies to develop two hypotheses geared to wards explicating the economic consequences of fair valuation. We respectively refer to these hypotheses as the business model hypothesis and the hardness hypothesis. Second, we test these hypotheses by reviewing previous research from the top three journals in the field. We find that the relationship between fair valuation and the usefulness of accounting information varies as a function of the business model employed by the entity under consideration. We also find that the effects of fair valuation are contingent upon differences in the hardness with which relevant assets and/or liabilities are measured. Overall, our results suggest that differences in an entity's business model and the hardness associated with fair value accounting measurement have measurable effects both on valuation and contracting usefulness of accounting information.

The circumstances which led to the development of each of these methods of accounting will be examined to better understand the context in which each technique was to be incorporated and its effect. Analysis will be performed on whether the use of these accounting practices changed since their inception and if so, for what purpose. The researcher will discuss how and if these accounting procedures become instrumental in relation to the valuation of housing assets, particularly in America. As a result of the financial crisis, some experts have expressed the opinion that Fair Value Accounting as opposed to the historical cost approach exacerbated the housing crisis while others have developed opinions that Fair Value Accounting had no negative affect on the crisis and in fact allowed for greater transparency in disclosure. The finding will analyze the effect of Fair Value Accounting on the housing crisis and whether the historical cost valuation method would be more effective and less...

This study focused on the emergence of accounting theory from practice towards general accounting theory in corporate organization in Nigeria. It was carried out, using Guinness Nigeria PLC. The study is based on primary and secondary sources of data. Data were gotten from the audited financial statement of organization for a period of four years (2014-2017) through simple random sampling technique. Regression analysis is used to test the hypothesis for this study at 5 per cent level of significance. Findings revealed that there is a significant relationship between accounting theory and accounting practice in corporate organization. It is recommended that organization should be consistent with type of accounting theory adopted in preparation of their various accounting records, since there is proportional relationship between accounting theory and financial reporting. Keywords: Accounting Theory, Accounting Practice, Corporate Organizations, Financial Statement, Normative Accountin...

The financial crisis of 2008 increased the call for standard setters and financial regulators to review the effectiveness of derivative regulation in improving financial reporting quality. Prior literature defines financial reporting quality as the extent to which financial statements provide information that is useful to investors and creditors in their investment decisions (Schipper, 2003; Schipper & Vincent, 2003). This review summarizes the empirical evidence regarding the effectiveness of derivative regulation in achieving its stated objective. Extant literature shows that although derivative regulations have improved information provided to investors, there is still room for improvement. Recommendations from this stream of literature suggest that the Financial Accounting Standards Board (FASB) require managers to provide more complete, transparent, and forwardlooking disclosures surrounding their derivative positions (Campbell, 2015; Franco-Wong, 2000). This review may be useful to standard setters, practitioners, and accounting academics by providing a synthesis of extant academic literature on the effectiveness of current derivative regulation. As the FASB and International Accounting Standards Board (IASB) continue to expand derivative accounting rules, this review may also be useful in identifying areas for future academic research.

Preparers of financial statements are in a position to influence the view of economic reality presented in those statements to interested parties. The term 'macromanipulation' is used to describe the lobbying of preparers against regulators (accounting standards setters) to persuade them to produce regulation that is more favorable to the interests of preparers. The aime of this paper is to introduce a suggested tool that could be used to ascertain why some financial accounting standards turn out to the benefit of one of the stakeholders involved in the process of accounting standards setting. This paper utilizes the construct of power to reveal the influences from parties involved in the process of accounting standards setting. The comprehensive income reporting standard is used in this paper as an example of these types of standard that may involve 'macro-manipulation'.

We investigate whether the measurement and reporting of comprehensive income in financial statements systematically affects commercial bank equity analysts' investment risk assessments and valuation judgments. In an experiment in which 80 buy side analysts specializing in banking and financial institutions participated, we vary whether a bank is exposed to or hedged against interest rate risk across three different comprehensive income accounting regimes-piecemeal fair value accounting with comprehensive income reported in the statement of changes in equity, piecemeal fair value accounting with comprehensive income reported in a separate statement of performance, and full fair value accounting with comprehensive income reported in a separate statement of performance. When fair value changes are measured and reported on a piecemeal basis, we find no investment risk or valuation judgment differences across CI reporting regimes. Although we find that the analysts' investment risk judgments are influenced by the banks' risk management strategies, their valuation judgments are not. Only when fair value changes are measured completely and reported transparently (i.e., full fair value accounting) do analysts' valuation judgments distinguish between banks with different levels of risk. The study contributes to three avenues of literature concerned with financial-reporting transparency, risk, and fair value accounting. First, our ex ante evidence informs accounting standard setters as they evaluate whether to move to full fair value accounting for all financial instruments, and assess the degree to which differences in comprehensive income measurement and reporting affect the information analysts obtain from financial statements. Second, the study adds to the experimental accounting literature that examines comprehensive income reporting format effects and valuation judgments. Third, we add to archival accounting research on the information in comprehensive income by testing market participants' judgments under different comprehensive income reporting regimes, which cannot be directly investigated with archival data.

Preparers of financial statements are in a position to influence the view of economic reality presented in those statements to interested parties. The term 'macromanipulation' is used to describe the lobbying of preparers against regulators (accounting standards setters) to persuade them to produce regulation that is more favorable to the interests of preparers. The aime of this paper is to introduce a suggested tool that could be used to ascertain why some financial accounting standards turn out to the benefit of one of the stakeholders involved in the process of accounting standards setting. This paper utilizes the construct of power to reveal the influences from parties involved in the process of accounting standards setting. The comprehensive income reporting standard is used in this paper as an example of these types of standard that may involve 'macro-manipulation'.

Preparers of financial statements are in a position to influence the view of economic reality presented in those statements to interested parties. The term 'macromanipulation' is used to describe the lobbying of preparers against regulators (accounting standards setters) to persuade them to produce regulation that is more favorable to the interests of preparers. The aime of this paper is to introduce a suggested tool that could be used to ascertain why some financial accounting standards turn out to the benefit of one of the stakeholders involved in the process of accounting standards setting. This paper utilizes the construct of power to reveal the influences from parties involved in the process of accounting standards setting. The comprehensive income reporting standard is used in this paper as an example of these types of standard that may involve 'macro-manipulation'.

This paper examines goodwill on corporate balance sheets.  Specifically, the paper measures the extent to which goodwill exists on corporate balance sheets and the degree of goodwill write-downs that have occurred recently.   We report on our study and a study by Intangible Business, which show that many firms carry substantial amounts of goodwill on their 2008 balance sheets.  Thus, because of the recent downturn in the economy and the markets, the potential for big bath earnings management for 2008 and 2009 exists.   In addition, because of reductions in expected returns on pension plan assets, many firms are likely to record much higher pension expenses.   We expect that the combination of goodwill impairments and increased pension expense will have significant effects on both the amount and the quality of earnings for 2008 and, possibly, 2009.

The primary purpose of this short article is to present a list of publications by Scholars Book Co. that Prof. Robert Sterling established. The books and monographs are of two types. While some were being published for the first time and were original, others have been previously published. The contribution of previously published books in accounting is wellknown. With the closure of Scholars Book Co., it is imperative that the 32 books that the publishing house printed should be preserved for accounting students and researchers. 1. INTRODUCTION This short article is aimed at sharing and documenting works that were deemed classic by or considered necessary from the perspective of Prof. Robert Sterling, an accounting scholar and theorist. He established Scholars Book Co. for publishing new books and reprints of previously published books. Some of the editions of books he selected for reprint are still available, and are being circulated among readers and interested individuals [1]. Considering their intellectual value, Prof. Sterling decided to republish them. Since the publishing house no longer exists and its founder is deceased, accounting researchers, historians, educators, and students should be aware

Fundamental economic principles provide a rationale for requiring financial institutions to use mark-to-market, or fair value, accounting for financial reporting. The recent turmoil in financial markets, however, has raised questions about whether fair value accounting is exacerbating the problems. In this paper we review the history and practice of fair value accounting, and summarize the literature on the channels through which it can adversely affect the real economy. We propose a new model to study the interaction of accounting rules with regulatory capital requirements, and show that even when market prices always reflect fundamental values, the interaction of fair value accounting rules and a simple capital requirement can create inefficiencies that are absent when capital is measured by adjusted book value. These distortions can be avoided, however, by redefining capital requirements to be procyclical rather than by abandoning fair value accounting and the other benefits that it provides.

Raymond J. Chambers was an internationally recognized scholar, influential theorist, as well as an important contributor to the study of the history of accounting thought. He was an advocate of the needs of financial statement users. He investigated what users, not accountants, considered important and what in fact was relevant to their decision-making. He challenged existing theoretical propositions which he believed were only rationalization of current practices. He argued that the lack of a rigorously developed theory of accounting led to contradictory and less relevant accounting practices. In his theory of continuously contemporary accounting (CoCoA), he demonstrated with logic and evidence that only an accounting system based on market selling prices is relevant to users' evaluation and decision-making process. Chambers dedicated a significant amount of his most recent work to his Thesaurus [1995] and to the origins and developments of conventional accounting. He endeavored to refute the widely held assumption that cost-based accounting is a superior rule. Besides launching Abacus in 1965, his works, Accounting, Evaluation and Economic Behavior [1966] and An Accounting Thesaurus [1995] are among Chambers' notable contributions to the accounting literature.

The circumstances which led to the development of each of these methods of accounting will be examined to better understand the context in which each technique was to be incorporated and its effect. Analysis will be performed on whether the use of these accounting practices changed since their inception and if so, for what purpose. The researcher will discuss how and if these accounting procedures become instrumental in relation to the valuation of housing assets, particularly in America. As a result of the financial crisis, some experts have expressed the opinion that Fair Value Accounting as opposed to the historical cost approach exacerbated the housing crisis while others have developed opinions that Fair Value Accounting had no negative affect on the crisis and in fact allowed for greater transparency in disclosure. The finding will analyze the effect of Fair Value Accounting on the housing crisis and whether the historical cost valuation method would be more effective and less...

ABSTRACTSince the 2007 market turmoil surrounding complex structured credit products, fair value accounting and its application through the business cycle has been a topic of considerable debate. As the illiquidity of certain products became more severe, financial institutions turned increasingly to model-based valuations that, despite increased disclosure requirements, were nevertheless accompanied by growing opacity in the classification of products across the fair value spectrum. In this study, we make an attempt to review an analysis regarding implications of the subprime crisis for accounting. These implications depend on the interplay among attributes of subprime mortgages and other positions, the evolution of market prices and illiquidity during the crisis, and the requirements of the applicable accounting standards, while credit losses on subprime positions are recorded under various standards. We focus on losses recorded based on the fair value measurement guidance provided...

In an earlier paper titled 'Mark-to-market accounting as a magnifier of financial crises', we advocated that fair value or mark-to-market accounting magnifies financial crises by creating a feedback loop between figures from financial reports and financial markets. We proposed a simple method for assessing how overpriced the US stock market is, which included a comparison between fixed base indexes of the S&P 500 and nominal US GDP. In this paper, we reiterate the role that fair value accounting is expected to play in both the creating and bursting of financial bubbles, putting it in the context of theories of 'reflexivity' and 'almost self-fulfilling equilibria'. We reassess the level of the US stock market, showing that a substantial stock market bubble (the third in the last two decades) has been formed recently and that significant market corrections may happen in 2016.

This study examines the economic implications of fair value liability gains and losses arising from the adoption of Statement of Financial Accounting Standards No. 159 (hereafter FAS 159). We find a positive correspondence between a firm’s FAS 159 fair value liability gains and losses and stock returns. Further analysis indicates that fair value gains and losses from liabilities attributable to the change in a firm’s own credit risk, which are considered counter-intuitive by critics of fair value accounting for liabilities, are also positively related to returns. We also document that the volatility of earnings that incorporate FAS 159 liability fair value gains and losses is positively associated with market measures of firm risk. Our study contributes to the controversy over recognition of liability fair value gains and losses by providing direct empirical evidence that such gains and losses are value and risk relevant.

The financial crisis of 2008 increased the call for standard setters and financial regulators to review the effectiveness of derivative regulation in improving financial reporting quality. Prior literature defines financial reporting quality as the extent to which financial statements provide information that is useful to investors and creditors in their investment decisions (Schipper, 2003; Schipper & Vincent, 2003). This review summarizes the empirical evidence regarding the effectiveness of derivative regulation in achieving its stated objective. Extant literature shows that although derivative regulations have improved information provided to investors, there is still room for improvement. Recommendations from this stream of literature suggest that the Financial Accounting Standards Board (FASB) require managers to provide more complete, transparent, and forwardlooking disclosures surrounding their derivative positions (Campbell, 2015; Franco-Wong, 2000). This review may be useful to standard setters, practitioners, and accounting academics by providing a synthesis of extant academic literature on the effectiveness of current derivative regulation. As the FASB and International Accounting Standards Board (IASB) continue to expand derivative accounting rules, this review may also be useful in identifying areas for future academic research.

Discuss the implications of materiality of financial information on "earnings management". Imply the content description and analysis of FASB Accounting Standards Codification™. The Professional View is used to confirm the absence of materiality guidelines in the US GAAP. Materiality, importance and significance are terms used to indicate the materiality consideration in the Codifications. The main conclusions are concerned to, first, the internal and external determinants and motives influence the practices of "earnings managements", and second US GAAP do not offer well defined guidelines to apply materiality on decision making.

ABSTRACTSince the 2007 market turmoil surrounding complex structured credit products, fair value accounting and its application through the business cycle has been a topic of considerable debate. As the illiquidity of certain products became more severe, financial institutions turned increasingly to model-based valuations that, despite increased disclosure requirements, were nevertheless accompanied by growing opacity in the classification of products across the fair value spectrum. In this study, we make an attempt to review an analysis regarding implications of the subprime crisis for accounting. These implications depend on the interplay among attributes of subprime mortgages and other positions, the evolution of market prices and illiquidity during the crisis, and the requirements of the applicable accounting standards, while credit losses on subprime positions are recorded under various standards. We focus on losses recorded based on the fair value measurement guidance provided...

Cet article essaie de repondre aux questions suivantes concernant l'information financiere sur le risque de liquidite publiee par les banques : • les informations requises par IFRS 7 sont-elles utiles pour les lecteurs des etats financiers pour apprecier le risque de liquidite d'une banque ? • les obligations d'IFRS 7 sont-elles coherentes avec celles du Comite de Bâle au niveau international ?

The author begins the paper with a brief historical development of the Statement of Financial Accounting Standards (FAS 157) and its impact on fair value accounting. This is followed by the methodology employed in the research. Next, he reviews the literature on major issues in fair value accounting and financial reporting, and presents his findings from the study. The researcher ends the paper with recommendations to enhance the usefulness of fair value accounting and draws implications for financial reporting and users of financial statements.

Workplace bullying is a pervasive and damaging employment problem facing U S. employers today. In the absence of current legal protections to prohibit and prevent workplace bullying, employers will need to address the problem in other ways. Anti-bullying policies can be adopted. The model Healthy Workplace legislation under consideration around the country could be used to provide a good template or existing civil rights anti-harassment and anti-violence policies can be broadened to proscribe bullying behaviors. Still, if employers truly want to extinguish bullying in the workplace before it occurs, they need to change the way they approach the problem. Management practices leading to an organization wide culture of mutual respect is the recommended course.

A careful analysis of four documents related to the formulation of objectives of financial statements (reporting) reveals that they are dominated by the pure form of capitalism. Two documents (the Trueblood Committee's Report and SFAC No.1) are constructed as normative theories based explicitly on the U.S. culture. The other two documents (the IASB's CF and the IASB-FASB's Joint CF) are not constructed in a theory form but implicitly based on the U.S. cultural background. The first two documents are more particular and clear regarding the formulation of the objectives of financial statements (reporting) and supporting arguments (logic). On the other hand, the other two documents are general and vague. Their generality and vagueness are attributed to the unnamed belonging to the cultural background on which the objective of financial statements (reporting) is based. The reason for not declaring the belonging of the cultural background is the fear that the objective of financial statements (reporting) and standards based on them might face an outright rejection by the overwhelming majority of countries in the world.

In September 2006, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards No. 157, "Fair Value Measurements" (SFAS 157). Later in 2008, U. S. banks were mired in a credit crisis. Many economists and bankers suggested that one cause of the 2008 credit crisis was the requirements of SFAS 157 and a movement began to have its provisions amended or rescinded. The result of this movement was the passage of FSP FAS 157-4. The purposes of this study are to chronicle the events that lead to the release of FSP FAS 157-4, to report on the impact of FSP FAS 157-4 for the quarter ending March 31, 2009 for a sample of banks and to investigate the characteristics of the banks that early adopted FSP FAS 157-4 as compared to the non-adopters. The results did not find the predicted income increasing effect and indicated that total asset size and financial asset size were significant factors in the early adoption decision.

In September 2006, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards No. 157, "Fair Value Measurements" (SFAS 157). Later in 2008, U. S. banks were mired in a credit crisis. Many economists and bankers suggested that one cause of the 2008 credit crisis was the requirements of SFAS 157 and a movement began to have its provisions amended or rescinded. The result of this movement was the passage of FSP FAS 157-4. The purposes of this study are to chronicle the events that lead to the release of FSP FAS 157-4, to report on the impact of FSP FAS 157-4 for the quarter ending March 31, 2009 for a sample of banks and to investigate the characteristics of the banks that early adopted FSP FAS 157-4 as compared to the non-adopters. The results did not find the predicted income increasing effect and indicated that total asset size and financial asset size were significant factors in the early adoption decision.

The circumstances which led to the development of each of these methods of accounting will be examined to better understand the context in which each technique was to be incorporated and its effect. Analysis will be performed on whether the use of these accounting practices changed since their inception and if so, for what purpose. The researcher will discuss how and if these accounting procedures become instrumental in relation to the valuation of housing assets, particularly in America. As a result of the financial crisis, some experts have expressed the opinion that Fair Value Accounting as opposed to the historical cost approach exacerbated the housing crisis while others have developed opinions that Fair Value Accounting had no negative affect on the crisis and in fact allowed for greater transparency in disclosure. The finding will analyze the effect of Fair Value Accounting on the housing crisis and whether the historical cost valuation method would be more effective and less...

Our paper presents early evidence on how investors rely on the fair value estimates of assets reported by banks as required by Statement of Financial Accounting Standards No. 157 (SFAS 157) in 2008. We observe significant variation in the pricing of different levels of fair value assets, with the pricing being less for mark-to-model assets (i.e., assets with lower liquidity and greater information risk) than for mark-to-market assets. We also find that the pricing of mark-to-model assets declined over the course of 2008, consistent with increasing market concerns about illiquidity and information risk associated with these assets. In the cross-section, we find evidence that mark-to-model assets are priced higher by investors for banks with greater capital adequacy. We also find that the pricing of fair value assets, especially the mark-to-model assets, is higher when banks are audited by better auditors. Overall, our paper uses both time-series and cross-sectional analyses to provide insights on investors' valuation of the fair value estimates of assets as reported by banks during the economic crisis.

Our paper presents early evidence on how investors rely on the fair value estimates of assets reported by banks as required by Statement of Financial Accounting Standards No. 157 (SFAS 157) in 2008. We observe significant variation in the pricing of different levels of fair value assets, with the pricing being less for mark-to-model assets (i.e., assets with lower liquidity and greater information risk) than for mark-to-market assets. We also find that the pricing of mark-to-model assets declined over the course of 2008, consistent with increasing market concerns about illiquidity and information risk associated with these assets. In the cross-section, we find evidence that mark-to-model assets are priced higher by investors for banks with greater capital adequacy. We also find that the pricing of fair value assets, especially the mark-to-model assets, is higher when banks are audited by better auditors. Overall, our paper uses both time-series and cross-sectional analyses to provide insights on investors' valuation of the fair value estimates of assets as reported by banks during the economic crisis.

The article states about how the decision usefulness paradigm was used as an approach in making investment decisions on financial information presented by an entity. The financial information presented in the entity's financial statements must be relevant and reliable to the information users, whether it is from internal or external parties to the entity. IASB (2008) The objective of financial reporting is to provide economic entities with high quality financial reporting information, especially for general finance, which is useful for making economic decisions. Decision usefulness paradigm is an approach in making investment or not investing decisions. By using literature methodology, various literatures, journals and others were used to conclude how the decision usefulness approach affects investment decisions.

With the continued conglomeration of commercial and investment banks, the question posed in this paper (while it may be a little dated) is whether fair value accounting (mark to market, etc) is appropriate to gauge the value of commercial bank assets?

GAAP is a contributing factor to accounting irregularities. A universal tool used by corporate management operating within an accounting system that has been created by accountants to serve the "user needs" of their corporate masters. This paper provides a synthesis of literature that focuses on the contributions of Robert R. Sterling, and the significance of exit values to contain earnings management and improve value relevance for the objectives of decision making and assessing management's stewardship of the entity's economic resources.

In an earlier paper titled 'Mark-to-market accounting as a magnifier of financial crises', we advocated that fair value or mark-to-market accounting magnifies financial crises by creating a feedback loop between figures from financial reports and financial markets. We proposed a simple method for assessing how overpriced the US stock market is, which included a comparison between fixed base indexes of the S&P 500 and nominal US GDP. In this paper, we reiterate the role that fair value accounting is expected to play in both the creating and bursting of financial bubbles, putting it in the context of theories of 'reflexivity' and 'almost self-fulfilling equilibria'. We reassess the level of the US stock market, showing that a substantial stock market bubble (the third in the last two decades) has been formed recently and that significant market corrections may happen in 2016.

A careful analysis of four documents related to the formulation of objectives of financial statements (reporting) reveals that they are dominated by the pure form of capitalism. Two documents (the Trueblood Committee's Report and SFAC No.1) are constructed as normative theories based explicitly on the U.S. culture. The other two documents (the IASB's CF and the IASB-FASB's Joint CF) are not constructed in a theory form but implicitly based on the U.S. cultural background. The first two documents are more particular and clear regarding the formulation of the objectives of financial statements (reporting) and supporting arguments (logic). On the other hand, the other two documents are general and vague. Their generality and vagueness are attributed to the unnamed belonging to the cultural background on which the objective of financial statements (reporting) is based. The reason for not declaring the belonging of the cultural background is the fear that the objective of financial statements (reporting) and standards based on them might face an outright rejection by the overwhelming majority of countries in the world.

Abstract: The application of fair value for measuring forest assets is a complex process
that involves different actors: accountants, valuators and auditors. The objective
of this paper is to analyze the construction process of fair value in biological forest
assets discussing subjectivity and conflct issues among the actors involved in this
process by the perspective of trust and risk presented by Giddens’ work (1990). The
phenomenographic research has been used to capture the conception of this evaluation
model among the involved actors. Across the interviews, three categories of outcomes
were identifid: “model”, that means the process of how information is generated and
treated until it turns to monetary values; impacts on earnings; and fially disclosure
and validation. The “model” constitutes the core element in reliability´s debate;
therefore it should involve and drive all the actors to a consensus on fial value of the
biological assets. Nevertheless, to achieve this model validation, critical factors should
be considered, such as, the selection of future prices of an asset - not always from an
active market; the impacts on earnings; that weakens the validation process. Another
negative aspect regarding the model validation is the business model used to manage
that asset – that can be either a raw material, or a product, raising conflcts in the
interpretation of this information, undermining the informational capacity of income.
It be concluded that reliability in fair value context is more linked to the consensus
of the involved actors then to the verifibility of the documents, reinforcing that the
accounting is a social construction process.

The main objective of this paper is to provide an analysis on whether mark-to-market accounting magnifies financial crises. Even though the results of numerous studies on this topic offer various conclusions, the majority of them conclude that fair value accounting, or mark-to-market accounting, does not cause financial crises. Most studies that had similar conclusions dealt with the 2006-2008 period, whereas we focus our research on period from 1881 to present day. Primarily, we will point out the historical context of the implementation of mark-to-market accounting and consequences it has, since it seems that some lessons from the past have been forgotten. We consider the long term relationship between US GDP and the S&P 500 index values and key historical developments to conclude that implementation of mark-to-market accounting contributes to creating of asset bubbles and assets overestimations. Even though mark-to-market accounting does not cause financial crises, it does magnify fundamental procyclicality which is inherent in efficient markets.

Abstract Financial institutions are often exposed to credit-sensitive assets such as loans and corporate bonds. Positions involving these securities could be entered into for hedging, speculation or diversification purposes. An important consideration in the design and risk management of these credit-linked portfolios is the ability to calculate the distribution of the total loss. In this paper, we develop analytical approximations for the distribution of the total loss due to defaults in a loan portfolio at a fixed time horizon.

The current process of accounting globalization is based mainly on the concept of just value. This concept has been the source of vivid debates with regards to its meaning in contemporary accountancy, both in theory and in practice. The increased importance of the concept of "just value", as well as the constantly increasing importance of financial assets have created the framework for developing a new value-based accounting model. The reshaping of the value-based accounting model consists of reconsidering the basic principles of valuation, allowing accountancy to progress from the system of historical cost to that of just value.

, Fair Value Measurements in 2006, there was controversy over the use and application of fair value accounting (FVA). This paper compares FVA to the conceptual framework of accounting embodied in FASB's Statements of Financial Accounting Concepts (SFAC's). FVA is found to deviate significantly from this set of guiding accounting principles in several respects. FVA sacrifices reliability for a questionable degree of relevance; it fails to faithfully represent what it purports to represent; it focuses on investors to the detriment of other user groups; and it changes the focus of financial reporting from earnings to asset valuation, from business transactions to market events, and from management performance to entity liquidation value. In addition, variations in the application of FVA among firms reduce comparability, consistency, and (although not in the conceptual framework) transparency-an oft-cited benefit of FVA. Pushing forward with FVA even beyond their international peers, US standard-setters seem more concerned with foreign approval than with the needs of their domestic constituents. FVA needs to be reevaluated, and FASB should adopt a mixed model approach that faithfully represents the values of assets and liabilities as they are intended to be used by management. Ultimately, the "new" FVA standards that emerge from this process should be thoroughly grounded upon and in agreement with the conceptual framework of accounting to serve the needs of all stated users of financial reporting.