+7 495 989 9610, 9am6pm (GMT+3), Monday – Friday
ИД «Финансы и кредит»

JOURNALS

  

FOR AUTHORS

  

SUBSCRIBE

    
International Accounting
 

A comparative analysis of the use of fair value and alternative valuation methods in IFRS

Vol. 24, Iss. 9, SEPTEMBER 2021

Received: 28 June 2021

Received in revised form: 9 August 2021

Accepted: 30 August 2021

Available online: 15 September 2021

Subject Heading: INTERNATIONAL STANDARDS OF ACCOUNTING AND REPORTING

JEL Classification: M41, M42, M48

Pages: 986–1000

https://doi.org/10.24891/ia.24.9.986

Viktor G. GET’MAN Financial University under Government of Russian Federation, Moscow, Russian Federation
VGetman@fa.ru

ORCID id: not available

Vladislav S. KARTASHOV Financial University under Government of Russian Federation, Moscow, Russian Federation
vladislav.sergeevich.k@gmail.com

https://orcid.org/0000-0002-8452-2839

Subject. This article analyzes the various types of value used in IFRS to assess assets and liabilities.
Objectives. The article aims to conduct a comparative analysis of the types of value used in IFRS when assessing assets and liabilities, and identify the features of the use of fair value as a type of value, considering the use of certain levels of fair value and restrictions on their use.
Methods. For the study, we used the systems analysis, comparative study method, information structuring, data grouping, deduction, and other methods of scientific research.
Results. The article summarizes the advantages and disadvantages of each of the valuation methods described in the Conceptual Framework for Financial Reporting – IFRS. It systematizes the standards that use certain types of value, and analyzes the features of the use of fair value. The article also identifies factors that affect the ability to measure a higher level of fair value.
Conclusions. Fair value is one of the most used valuation methods in international accounting practices. However, the use of fair value in estimating the value of reporting items is limited due to the complexity and high cost of its qualitative valuation. This makes companies use alternative valuation methods.

Keywords: fair value, IFRS, advantages, disadvantages

References:

  1. Klimova Yu.V. [Historical and fair values: conceptual approaches to assessment]. Vestnik Adygeiskogo gosudarstvennogo universiteta. Seriya 5: Ekonomika = Bulletin of Adyghe State University. Series 5: Economics, 2015, no. 3, pp. 180–184. URL: Link (In Russ.)
  2. Kulikova L.I., Stepanov K.A. [Discounted value: valuation of assets and liabilities]. Mezhdunarodnyi bukhgalterskii uchet = International Accounting, 2009, vol. 12, iss. 10, pp. 26–32. URL: Link (In Russ.)
  3. King A.M. Otsenka spravedlivoi stoimosti dlya finansovoi otchetnosti: Novye trebovaniya FASB [Fair Value for Financial Reporting: Meeting the New FASB Requirements]. Moscow, Al’pina Pablisher Publ., 2011, 383 p.
  4. Zack G.M. Spravedlivaya stoimost' – soblazny manipulirovaniya otchetnost'yu. Novye global'nye riski i metody ikh vyyavleniya [Fair Value Accounting in Financial Statement Fraud: Strategies for Detection and Investigation]. Moscow, Maroseika Publ., 2011, 230 p.
  5. Alexander D., Bonaci C.G., Mustata R. Fair Value Measurement in Financial Reporting. Procedia Economics and Finance, 2012, vol. 3, pp. 84–90. URL: Link00124-4
  6. Heilmann C. Values in Time Discounting. Science and Engineering Ethics, 2017, no. 23, pp. 1333–1349. URL: Link
  7. J. Alex Milburn. The Relationship between Fair Value, Market Value, and Efficient Markets. Accounting Perspectives, 2010, vol. 7, iss. 4, pp. 293–316. URL: Link
  8. Petrova A.N., Bazhenova V.I. [The concept of fair value]. Vestnik Rossiiskogo ekonomicheskogo universiteta im. G.V. Plekhanova = Vestnik of Plekhanov Russian University of Economics, 2017, no. 5, pp. 72–77. URL: Link (In Russ.)
  9. Pambukhchyan K.R., Shapoval E.V. Otsenka stoimosti po MSFO po spravedlivoi stoimosti: Sbornik nauch. statei [Value measurement according to IFRS at fair value: collection of scientific articles]. St. Petersburg, RITs Kul't-Inform-Press Publ., 2017, pp. 145–147.
  10. Solov'eva O.V. [Measurement of the elements of financial statements in accordance with the International Financial Reporting Standards (IFRS)]. Audit i finansovyi analiz = Audit and Financial Analysis, 2008, no. 6, pp. 1–8. URL: Link (In Russ.)

View all articles of issue

 

ISSN 2311-9381 (Online)
ISSN 2073-5081 (Print)

Journal current issue

Vol. 24, Iss. 9
September 2021

Archive