Essay on The International Accounting Standards Board

793 Words 4 Pages
Introduction
In recent years, the International Accounting Standards Board (IASB) and the Financial Accounting Standards Board (FASB) supported the use of fair value over historical cost in order to improve the relevancy of the information in the financial reports and to provide the information for stakeholders
The aim of using fair value method is to revaluate and update the value of an assets or a liability based on current prices in liquid markets. Unlike the historical cost that the book value of assets is based on the price that was originally paid .one of the problems in the historical cost that it’s not flexible with changes in economy and prices. That was one of the main reasons for issuing the “IFRS 13 Fair Value Measurement”.
IFRS 13 (Fair Value Measurement) was issued by the International Accounting Standards Board (IASB) on 12 May 2011
The main objectives of IFRS 13 are to:
• defines fair value
• sets out in a single IFRS a framework for measuring fair value
• requires disclosures about fair value measurements
The fair value concept is used in several IASB standards including, IAS 16 Property, Plant and Equipment, IAS 37 Provisions, Contingent Liabilities and Contingent Assets; IAS 38 Impairment of Assets, IAS 40 Investment Properties, and IFRS 3 Business Combinations
Fair value Definition
Is an accounting term defined by the security exchange commission (SEC) fair value is the amount of an assets can be sold or transfer the liability settled under normal…

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