Fair value – from the Romanian reality perspective

Citation

(2011), "Fair value – from the Romanian reality perspective", International Journal of Accounting & Information Management, Vol. 19 No. 2. https://doi.org/10.1108/ijaim.2011.36619baa.021

Fair value – from the Romanian reality perspective

Article Type: Abstracts From: International Journal of Accounting and Information Management, Volume 19, Issue 2

The globalization of financial markets, the internationalization of economic entities and the need to submit relevant information to current and potential investors led to the progressive development of the concept of fair value in accounting. Presently, it is accepted that fair-value measurement presents more relevant information than the measurement at historical cost. But the reliability of fair value is questioned because it depends very much on the asset which has to be measured and the existence of active markets where assets can theoretically be negotiated. In the absence of active markets, the estimation techniques are often used to determine fair value with sufficient reliability to satisfy qualitative characteristics of accounting information. In order to reflect the reality of this new world, the IASB has introduced IFRS accounting rules which require or recommend the use of fair-value measurement as the basis for most items in the financial statements of an economic entity. The opportunity of introducing this new concept has given rise to intense debate, particularly as regards the financial instruments, to reach its peak with the onset of financial crisis. Currently, discussions bearing on the timing in which fair-value measurement will be extended to all elements of financial statements. The purpose of this study is to answer the next question: are professional accountants in Romania ready to apply a fair-value accounting?

Keywords: Fair value, Professional accountants, Measurement, Financial accounting

Mihai Ristea and Ionel JianuThe Bucharest Academy of Economic Studies, Bucharest, Romania