Why Fair Value Accounting Can't Work

King, Alfred M.
July 1999
Financial Executive;Jul/Aug1999, Vol. 15 Issue 4, p53
Academic Journal
The article focuses on problems with fair value accounting models. It states that financial executives and managers believe fair value accounting is not viable because the operations can be distorted because of unrealized changes in values and because it isn't possible to determine an exact value using the models. It presents an example of valuation reports presenting the liquidation value of assets for possible sale to a third party by a bank, and a report for financial reporting for the U.S. Securities and Exchange Commission (SEC); it mentions that the valuation report for the bank would not be acceptable by the SEC, while the SEC report wouldn't be interested in allocation values.


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