Relevance of Fair Value Accounting

Relevance of Fair Value Accounting

Abstract – A succinct summary of your main arguments/points and your conclusion. The abstract should summarise the aim of the essay, the methods/arguments used, the results and conclusions (in relation to the topic). You should not refer to other sources or include detailed discussions.

Introduction – Outline the general “map” of your essay, from the more general aspects of the topic, to the specific aspects and how you are going to address them.

Body/Main analysis – Marks are to be allocated for the identification and discussion of relevant issues.

Conclusion – A strong summing up of the findings

Correct referencing – Harvard method to be used. Only the references actually referred to in the body of the report should be included in the list of references – a penalty will apply (depending on the number of instances) for references appearing in the text and not on the list, and vice versa.

Language – this is a communications task in written English and therefore is to be assessed as such. These marks are awarded for proficiency in all aspects of written communications i.e., grammar, spelling, sentence construction and language.

LENGTH – Between 1700 -1800 (maximum) words. This word count excludes title/cover sheet and list of references, but includes the abstract. The abstract should comprise a maximum of 150 total word count.

Style and format: Must be in 12 point font, double line spaced with min 2cm margins. The essay must include an abstract and reference list compiled under the Harvard method of referencing. The list should be limited to sources referred to in the actual essay.

Major Essay – IFRS (International Financial Accounting Standard) 13 is about the measurement of fair value. It specifies amongst other things the definition and hierarchy to be used in fair value measurements. Laux and Leuz (2009, p833) argue that “the fair value debate is far from over and much remains to be done”.

Required: Based on the above statement, write an essay on the relevance of fair value accounting in the contemporary world. Your essay should include but not limited to a discussion on whether fair value accounting is applicable for a wide range of organisations in financial reporting. Also, explain and analyse whether fair value accounting has had any influence on the subprime and related crises over the world in the recent past. The expectation is that a minimum of 12 contemporary research articles (out of which at least 6 academic journal articles) are used in the body of the essay. Also, you are required to elaborate and analyse the current status of fair value accounting.

MUST LOOK AT THE FOLLOWING ARTICLES :

(MOST IMPORTANT) Laux, C., and C. Leuz, 2009, “The crisis of fair-value accounting: making sense of the recent debate”, Accounting, Organizations and Society, Vol 34, pp 826-834.

Lodh S.C. and M. J. R. Gaffikin, 2010, “Assessing underlying realities of accounting’s duality check by the accounting equation: a search for an augmented framework”, paper presented at the APIRA Conference, Sydney, July. http://apira2010.econ.usyd.edu.au/conference_proceedings/APIRA-2010-307-Lodh-Accountings-duality-check-by-the-accounting-equation.pdf

McSweeney, B. (2009), ‘The roles of financial asset market failure denial and the economic crisis: Reflections on accounting and financial theories and practices’, Accounting, Organizations and Society 34, pp835–848

Bougen, P. H., and J. J. Young, ‘Fair value accounting: Simulacra and simulation’, Critical Perspectives on Accounting, (article in press)

Hitz, J. M. (2007), The decision usefulness of fair value accounting: A theoretical perspective’, European Accounting Review, Vol. 16, Issue 2, pp 323 – 362