Fair Presentation---an Ethical Perspective on Fair Value...

53 FAIR PRESENTATION---AN ETHICAL PERSPECTIVE ON FAIR VALUE ACCOUNTING PURSUANT TO THE SEC STUDY ON MARK-TO-MARKET ACCOUNTING Sharon S. Seay, Macon State College Wilhelmina H. Ford, Macon State College ABSTRACT Fair value accounting has received a significant amount of blame as the cause of the current financial crisis. Fair value accounting does not cause illiquidity or volatility in financial markets. Banks, rather than accounting, caused the existing crisis, ultimately through bad lending decisions and inadequate risk management. Accounting rules are designed to reveal the full extent of losses and future risks. This transparency would enable banks, regulators, and government to identify specific sources of the crisis and take†¦show more content†¦Continued use of current (fair) values is consistent with FASB’s and the IASB’s conceptual preference for the primacy of the balance sheet over the income statement. Fair value represents measurements related to the present. Historical cost represents measurements relating to the past. Current GAAP requirements for fair value measurement of select assets and liabilities hark back to the banking and Savings Loan crisis of the 1980s. At that time, many financial institutions were paying higher interest on deposits than they were earning on long-term fixed-rate mortgage loans. The historical cost model, the prevailing measurement attribute under GAAP at that time, masked the problem by recognizing losses gradually through negative net interest income. The current value of the institutions’ assets was less than the current value of the liabilities, effectively making the institutions insolvent. The historical cost model obscured the problem due to the requirement of carrying assets at inflated cost figures. Therefore, transparency was greatly diminished. Existing fair value and mark-to-market requirements were developed over several decades to address specific market events or conditions as noted above. These standards were the result of an extensive due process, and theirShow MoreRelatedMark to Market Accounting3163 Words   |  13 Pageshead: Mark to Market Accounting Mark to Market Accounting and Ethical Issues Ethical Issues ACC-504 April 16, 2012 Abstract Economic principle’s rationale for requiring guidance for financial institutions is to use mark-to-market accounting or fair value accounting on their financial reports. With the current economic crisis, questions have been raised as to whether or not fair value accounting is making this crisis worse. In this paper I review the history of fair value accounting and theRead MoreNokias Human Resources System144007 Words   |  577 PagesForm 20-F 2010 Nokia Form 20-F 2010 As filed with the Securities and Exchange Commission on March 11, 2011. UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 20 ­F ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2010 Commission file number 1 ­13202 Nokia Corporation (Exact name of Registrant as specified in its charter) Republic of Finland (Jurisdiction of incorporation) KeilalahdentieRead MoreFinancial Analysis of General Electric98175 Words   |  393 Pagesof 13,000 jobs in the United States since 2009. ON THE COVER Wellington Pereira dos Santos Operator II GE’s Wellstream facility in Niterà ³i, Brazil, is a leading producer of high-quality ï ¬â€š exible pipe equipment for the Brazilian offshore drilling market, part of a $500 million expansion of operations in the country. Note: Financial results from continuing operations unless otherwise noted. GE Works At GE, we put our ideas to work. Taking them off the paper, out of the lab and into the worldRead MoreMedicare Policy Analysis447966 Words   |  1792 PagesCoverage Expenses Subtitle C—Disclosures To Carry Out Health Insurance Exchange Subsidies Subtitle D—Other Revenue Provisions rmajette on DSK29S0YB1PROD with BILLS DIVISION B—MEDICARE AND MEDICAID IMPROVEMENTS TITLE I—IMPROVING HEALTH CARE VALUE Subtitle A—Provisions related to Medicare part A Subtitle B—Provisions Related to Part B Subtitle C—Provisions Related to Medicare Parts A and B Subtitle D—Medicare Advantage Reforms Subtitle E—Improvements to Medicare Part D Subtitle F—MedicareRead MoreProject Managment Case Studies214937 Words   |  860 PagesPROJECT MANAGEMENT CASE STUDIES, SECOND EDITION - PROJECT MANAGEMENT CASE STUDIES, SECOND EDITION HAROLD KERZNER, Ph.D. Division of Business Administration Baldwin-Wallace College Berea, Ohio John Wiley Sons, Inc. This book is printed on acid-free paper. @ Copyright O 2006 by John Wiley Sons, Inc. All rights reserved. Published by John Wiley Sons, Inc., Hoboken, New Jersey Published simultaneously in Canada No part of this publication may be reproduced, stored in