On the Subjectivity of Accounting - Literature review Example

International Fair Value Accounting (Case 15-2) a) Nowadays there is a recent trend prevailing in accounting standards which is known as harmonization of accounting standards among the leading accounting standards setting bodies across the globe.... The main reason behind convergence of accounting standards is that the corporations are offering their products and services globally.... Under both types of accounting, if the fair values of the asset are increased, then stockholders' equity is also increased directly such that it has no impact on the net profit of the entity....

? Generally Accepted Accounting Principles or GAAP is the collection of the commonly set of rules of accounting standards used for financial reporting.... Fair market price is determined by the amount reflected on documents accompanying the goods and/or services to ensure objectivity and accuracy of accounting when purchases are made.... Generally Accepted accounting Practice Class University Date I.... In the United States, it is the Financial accounting Standards Board (FASB) that sets the GAAP standards for private firms while it is the IASB sets principles for international accountants (Horngren et al, 2008)....

The financial reporting standards perform the function of regulating the business world by laying down the accounting standards and procedures which the limited companies need to follow.... The government has its role in regulating the businesses by way of the Company Law; the accounting professionals perform their duties by preparing, interpreting and implementing the accounting standards being prepared for the financial reporting purpose; and finally the stock exchange keeps a check by having various stock exchange rules for the companies listed on the London Stock Exchange....

This essay Fair Value accounting talks that the proponents of fair value accounting states that fair value accounting is important for a number of reasons: They provide the information that is very relevant to users of financial statements; and they ensure comparability of financial statements.... This essay stresses that the arguments against fair value accounting appear to outnumber those in favour.... However, even though fair values may be said to be current and therefore more comparable, the fact that judgement need to be exercised brings subjectivity into play....

The objective is to secure a challenging position as a Bank Teller with a progressive company that will enable me to nurture my accounting passion.... nbsp;I am applying for this position due to its challenging nature, which would enable me to sharpen further my problem-solving skills....

Critics have claimed that fair-value accounting had a hand in the 2008 financial crisis.... They mainly claim that the fair value accounting makes firm to experience advantage in boom… This has resulted to huge debates concerning the advantages and disadvantages of fair value accounting (Laux and Leuz, 2009, pp.... This is the main reason, critics of fair value accounting claim that it had a hand in the financial crisis that occurred....

IASB Framework recognizes a number of accounting concepts that accountants must adhere to in preparing the financial statements.... Because users of financial statements make decisions based on the information presented in these financial statements, accountants are expected to ensure that the information presented is as accurate as possible and are in tandem with the accounting concepts and principles.... Accountants are expected to follow the accounting concepts and principles in preparing financial statements to ensure that users are not misled by the adoption of practices and policies that are in violation of the accounting profession....

This research will begin with the statement that the IFRS has the potential to benefit investors who are currently operating under the Generally Accepted accounting Principles.... From an accounting perspective, it makes the professional obligations easier to meet as the records kept are similar for all firms, unlike the use of local accounting standards which make the reliability and comparison of documents complicated processes.... On the other hand, the Generally Accepted accounting Principles are regulations and standards for accounting purposes that are implemented for a particular jurisdiction....