Fair value measurement in the prospective orientation of contemporary financial reporting – Who needs it?
Journal Title: Zeszyty Naukowe Wyższej Szkoły Bankowej w Poznaniu - Year 2016, Vol 66, Issue 1
Abstract
The purpose of this paper is to analyze the role of fair value measurement in contemporary financial reporting, the consequences it has for the quality of financial information, and to examine the real economy impact of the fair value option. In the first part of the paper, the author conducts theoretical studies of the elements of the prospective orientation of financial reporting and the role the fair value measurement plays in the realization of the financial reporting purpose. Reference to the traditional historical cost approach is made. In the second part, the author examines the consequences of the fair value option (FVO) for the real economy. In the author’s opinion, it is likely that FVO implementation may force managers to more aggressive market behavior, which ultimately is not in favor of any stakeholder and, on the global scale, may easily destabilize markets.
Authors and Affiliations
Wojciech Hasik
Keywords
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