Time to focus on fair value determination
Article Abstract:
The publication of Statement of Standard Accounting Practice 14, Group Accounts, attempts to establish a standard for determining fair values in accounting for mergers. The fair value of the consideration given in an acquisition is currently determined in a variety of ways. One view is that the acquirer's cost is the amount of money foregone by not issuing the shares on the market. Another view is that share price movements in the post-announcement period should be reflected in the cost of the investment. The objective of fair value determination should not be to estimate costs so much as to ensure that the balance sheet amounts for assets and liabilities should include any profits that have been accrued prior to the acquisition.
Publication Name: Accountancy
Subject: Business
ISSN: 0001-4664
Year: 1988
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Burning issues and fire fighting
Article Abstract:
The Accounting Standards Committee is facing criticism because it does not offer quick responses to developments that occur, and it does not construct guidelines on current problems. Recommendations of investigating committees have reiterated the need for a fast-response mechanism, but the mechanism must not compromise the required normal procedures for the development of complete accounting standards.
Publication Name: Accountancy
Subject: Business
ISSN: 0001-4664
Year: 1989
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