Fair Value Accounting Essay Example | Topics and Well Written Essays - 4250 words

Fair Value Accounting - Essay Example Since then, the pros and cons of fair value accounting have been debated. On one hand, fair values provide a better view of current market conditions and therefore provide him with more relevant information. However, on the other hand it increases volatility in earnings and may not necessarily ensure reliability and relevance. This is because if an active market does not exist, it would be determined by calculations which are subject to management bias. While some people argue that fair value accounting provides us with truer financial statements, others question its validity. Hence, those institutions that use more and more of fair value option should also disclose adequate information regarding the assumptions, changes in acquisitions or sales, predictions and all those factors that affected the values that show in the financial statements as fair values. This would enable the users of financial statements to make knowledgeable and wise decisions. Fair value accounting is a way of accounting in which an asset or liability is valued at its current exchange price at a measurement date, in absence of an actual transaction for that asset or liability. In financial statements, all financial instruments may be valued at fair value. Before 200... The statement defines fair value of an asset as the price at which it can be traded or sold in an orderly transaction between 'market participants', other than in insolvency. Similarly, fair value of a liability is the amount at which it can be acquired or settled in an existing transaction between 'market participants', other than in insolvency. (KPMG, 2007) Market participants refer to buyers and sellers in the most principal or beneficial markets for those assets or liabilities. They meet four criteria: they are unrelated with the reporting body; they possess the knowledge required to have a realistic insight into the transactions; they are financially and legally able to carryout transactions for the entity; they are prepared to transact without any pressure. (KPMG, 2007) Principal market is the market with maximum volume and level of activity where assets and liabilities are sold or traded by a reporting entity. An entity that does not have a principal market determines its most beneficial market by including the transaction costs. (KPMG, 2007) Explanation Fair value of an asset may be equal to its quoted market price. However, this may not always be true. Fair value takes into account advantages and disadvantages that each party may gain from the transaction whereas market value may not always consider that. Also there might not be a quoted price for all assets or liabilities. In such circumstances, fair value has to be generated using the best information available to the preparers. Consequently, difficulties arise in creating those estimates. (KPMG, 2007) In accounting, fair value is used for those assets or liabilities whose carrying value is rooted in mark-to-market value. Carrying value is the amount

Buddhism' s Success in China Essay Example | Topics and Well Written Essays - 750 words

Buddhism' s Success in China - Essay Example To support this answer, this paper will compare and contrast Buddhism to Confucianism/Legalism and Daoism. Buddhism was originated in northern India, near the Himalayan Mountains, by Prince Gautama, during the sixth century B.C. Stearns summarized that the system advocated by the prince taught that enlightenment - and therefore contentment and peace in life - was achievable only through abstinence from things that promoted misery, such as sensations, perceptions, thinking, reasoning and desire for things which men find agreeable - anything that appealed to the delight of men (75-77). Because of this abstinence and its reflection on Buddhist priests and adherents, Buddhism at its early stages could be seen as emblematic of the simplicity of the Four Truths, and how each and every individual, from the lowly workers to the exalted royals, could hold to its precepts. According to Stearns, the 'Divine Sage' Confucius (Kong Fuzi) proposed a system of harmony and keeping to the Way as "a social and political ethos derived from idealized values of the past" (36). As a system it was rooted in morality and ethics, providing reason and regulations, down to the smallest measure of a 'gentleman's' conduct in a very systematic, measured and precise way. Comparing Confucianism to Buddhism puts two things into perspective: one, Confucianism focused on conduct and propriety, a worldlier set of functions, whereas Buddhism focused on abstaining from worldly matters in general. Two, Confucianism was seen as something of an appointment, an elevation to and reward of power above the rest, and therefore not suited to the common people. This level of classism was not apparent in Buddhism. Legalism The primary advocate of Legalism was Han Feizi, who advanced Confucianism into a more pragmatic viewpoint. As Stearns stated, "this harsh but effective solution for resolving the chaotic conditions that plagued the Zhou dynasty included the introduction of new managerial techniques, improved bureaucracy, enhanced communication, land reforms and standardization of weights, measures and coinage" (43). Legalism was a law-driven approach to government, and as such dealt mostly with an ancient notion of cause and effect and consequently dealing effectively with the criteria that drove and defined such polarities. Again, in the contrast of Legalism with Buddhism, we draw the conclusion that Legalism was a more restrictive approach to government, focusing on controlling and compelling the masses rather than catering to the individual's needs. Legalism can be equated to a top-down method, whereas Buddhism could be seen as a bottom-up method; individual contentment begets collective contentme nt, as opposed to informed manipulation by a few to drive the collective towards restrictive unity. Legalism was more a political system rather than a religious one. Daoism Like Confucianism, Daoism proposed adherence to a 'Way', holding a similarity to Confucianism in this. Proposed by