THE (UN?) FAIRNESS OF FAIR VALUE: SFAS 157, IRVING FISHER AND GECON
Objective: The objective of this study is to assess the level of adherence of explicit and implicit measurement concepts present in SFAS 157 – Fair Value Measurements to traditional economic-accounting concepts. Background: The expansion of situations in which fair value measurement is required m...
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| Format: | Article |
| Language: | Portuguese |
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Universidade Federal da Paraíba
2017-01-01
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| Series: | Revista Evidenciação Contábil & Finanças |
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| Online Access: | http://periodicos.ufpb.br/index.php/recfin/article/view/32293/16915 |
| Summary: | Objective: The objective of this study is to assess the level of adherence of explicit and implicit measurement
concepts present in SFAS 157 – Fair Value Measurements to traditional economic-accounting
concepts.
Background: The expansion of situations in which fair value measurement is required makes more
difficult to ensure that the computed measure of value is actually fair. Out of the objectivity of current
sales prices in an active market, all other measures of value are expectations about the future,
inherently uncertain and inaccurate. Thus, the desired justice of the computed figures lies not in its
accuracy, but in the using of the correct concepts for measuring accounting transactions and events.
Method: To reach the objective, the characteristics of this standard are confronted with the secular
concept of capital and income set by the laureate American neoclassical economist Irving Fisher,
which were incorporated into Information System for Economic Management (Gecon).
Results: The results indicate that SFAS 157 fair value concept and measurement structure are incorrect
or incomplete, suggesting that the maintenance of the fair value expression in accounting seems
inadequate.
Contributions: This paper contributes to the literature on accounting measurement showing that as
a measurement concept in accounting fair value seems inadequate. In abnormal situations or absence
of a market, the measure found is always inexact and subjective, and therefore is not correct
to call fair the quantity resulting from this arbitrary calculation. |
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| ISSN: | 2318-1001 2318-1001 |