1.Introduction
The Enron crisis that shook the American economy to its core in early 2000 pushed the regulators to issue rules to make it easier for investors to understand the value of a company’s assets and reduce (at least partially) the complexity of structured finance. At the time, one of the best solutions seemed the fair value accounting aimed at more relevant and useful reporting. Regulators believed that fair value encouraged the transparency and comparability that would help investors regain their trust in the financial markets and institutions. Following the Enron scandal, the American standard setter - Financial Accounting Standards Board (FASB) has assumed the task of issuing a standard on fair value measurement (FAS no 157). According to this standard, the assets are labeled in one of the three categories depending on their relative liquidity:
Level 1 includes the most liquid assets whose value stems from a quoted
price in an active market;本文来自优,文~论'文·网原文请找腾讯32491,14
Level 2 includes assets valued using observable market data other than a
quoted market price;量子免疫算法的改进及其在组合优化中的应用英文论文
Level 3 includes the hardest-to-value assets whose fair value can be determined only through unobservable inputs and prices that are based oninternal models and estimates.
Precisely this 3rd level has raised the most critics1 related to the compulsory use of a market value for a transaction or financial asset/liability for which there is no liquid market. The debate about fair value accounting has made the front-page news again dueThe debates on level 3 were so intense due to the fact that these assets represented a significant part of total balance-sheet assets rising to almost $550 billion combined for the first quarter of 2008 just at: Morgan-Stanley, Goldman Sachs, JPMorgan Chase, Citigroup, Lehman Brothers and Merrill Lynch.to the total collapse of the mortgage-backed securities market and the housing credit market.The lack of liquidity of aforementioned markets has generated debates among bankers, auditors and politicians, all trying to find a scapegoat for the actual crisis. The blame was placed on fair value accounting once again, although paradoxically it was seen as a solution for the crisis not long ago.
2.The background much attention and controversy
Since the 80's, the U.S. accounting profession and the financial sector has been financial instruments, in particular the recognition of derivative financial instruments, measurement and disclosure of the issue debated. Despite the recognition and measurement of financial instruments, the problem has not yet made a breakthrough, but discussion of these issues deepened the understanding of the historical cost measurement model a serious flaw - the lack of relevant knowle. Especially the 80's, the United States more than 2,000 financial institutions engaged in financial instrument transactions in financial difficulty, but to establish the historical cost measurement model on financial reporting in these financial institutions into financial before the crisis, often also show "good" results of operations and "healthy" financial position. Many investors believe that historical cost financial reports not only failed to give investors the financial regulatory and warning signs, and even misled investors in these financial institutions to judge. To this end, they strongly urge the Financial Accounting Standards Board (FASB) to reconsider whether the historical cost measurement model for financial institutions.2413
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