Fare Value Accounting affected by current market situation

According to an article at BizTimes, the current state of the marketplace has damaged the effectiveness of Fair Value Accounting, otherwise known as market-to-market accounting. This rule calls for companies to reflect the current market value of their assets of the balance sheets.

P. J. Patel, CFA, senior vice president of Valuation Research Corp, who conducted the study stated, "Respondents to this survey came down hard on Fair Value Accounting. While in less volatile times, Fair Value Accounting has improved transparency, in unusual times like we've seen, FVA becomes more difficult to implement and understand.”

Read the full story here.