Arguments for
fair value :
- Fair Value is an unbiased and rational estimate of market price
of any goods and services.
- Fair Value provides more relevant information to users of
financial statements.
- Fair Value works on the forces of market forces.
- Fair Value reflects the best market conditions.
Arguments
against fair value :
- Fair Value does not provide a good estimation of any good or
service if it does not have a active maket.
- Fair Value may fluctuate in short run hence less reliable.
- Fair Value reduces investors satisfaction.
- Fair Value loses the historical perspective.