Question

Discuss the impacts of fair value as they relate to organizations that regulate accounting practices. What should businesses do to ensure alignment with them in their accounting practices?

Answer 1

Fair value accounting refers to the method of reporting changes in asset and liability values over time. A main impact of fair value accounting is that it gives accurate asset and liability valuation on an ongoing basis to users of the organisation's reported financial information. Moreover limits a business ability to potentially manipulate the reported net income

To ensure alignment with them in their accounting practices companies must reporting this method to provide realistic financial statements. They are more accurate than those not using this method. Furthermore assist investors to make wiser decisions in regard to their investment options with the company because it gives best useful decision-making information. Also allows for reduction in asset within that market so that a company can have a fighting chance