Fair Value Reporting – More Informative than Historical Cost

As pointed out in a recent Accounting Today article, “Study by FASB Member Rebuts FASB Proposed Changes in Fair Value Accounting Standard” (http://www.accountingtoday.com/news/Study-FASB-Member-Rebuts-Changes-Fair-Value-Accounting-66892-1.html?ET=webcpa:e7165:221363a:&st=email), Thomas J. Linsmeier, an FASB Board member, and Kathy Petroni, an accounting professor, have coauthored an academic study that provides evidence that fair value reporting for financial instruments is more informative for investors and potential investors than other accepted approaches for measuring financial instruments.

Dr. Linsmeier and Dr. Petroni’s article will be published in an upcoming issue of The Accounting Review, a well-respected academic accounting publication.

The Accounting Today article also points out that Dr. Linsmeier voted against two recent FASB proposals addressing the recognition and measurement of financial instruments because he argued that the proposed approaches were not as informative as fair value reporting.

The proposals that Dr. Linsmeier opposed address accounting for credit losses on financial assets and recognition and measurement of financial instruments. Both proposals can be obtained from the FASB website (fasb.org).

Advertisements

About docjonz

I am an Associate Professor of accounting at Hofstra University in Hempstead, NY. Additionally, I have more than 30 years of professional accounting experience in various capacities including auditing, accounting standard setting and corporate accounting policy.
This entry was posted in Financial Accounting and tagged , , , , , , . Bookmark the permalink.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s