Advanced financial accounting Essay Example | Topics and Well Written Essays - 4000 words

Advanced financial accounting - Essay Example The use of Fair value of in the UK’s Financial Reporting Standards appears to take the position of the US Academics which is conservative in character. This is supported by the statement of The Association of Chartered Certified Accountants (ACCA) which stated that the UKs Accounting Standards Board (ASB) has put itself in a potentially serious conflict with the International Accounting Standards Board over the use of fair value.1 ACCA reported the response the IASB’s discussion paper ‘Fair Value Measurements’, where the ASB made clear it rejection of much of the underlying rationale of the IASB’ paper’s proposals. The ASB seemed to have asserted that the use of the US approach to fair value was not appropriate in Europe. While the US standard SFAS 1572 could useful as a methodology to know market-based exit prices, as admitted by the ASB, the UK board is not fully convince that the assumption that fair value3 should necessarily be equated with exit value.4 ASB does not also accept to have a ‘one size fits all’ approach to fair valuation as it suggested instead ‘standard by standard’ basis. It also criticized the statement â€Å"that fair value should always be assessed from the perspective of a market participant, rather than the entity† as it asserted more prominence to be given that would address the importance of entity-specific measures.5 Given the position taken by the ASB in its statement or comment concerning the fair value accounting, it is doubtful if UK will recognize the importance of fair values, with reference to international accounting standards the same way that IASB is giving the same issue in accounting. 2.2 Describes the alternative methods by which assets and liabilities could be measured, and critically assesses the performance of each method against the Qualitative Characteristics of financial information described in the ASB’s Statement of Principles (the Conceptual Framework). The