In: Accounting
Discuss the role of FVA in promoting relevance and reliability in accounting measurements and using a case from a local context depict whether FVA is accepted and widely used in the Pacific.
FVA is fair value accounting which suggest that assets and liabilities of any company should carefully considered and report in the company’s financial book of statement at market condition.
Under fair value accounting, companies are permitted to calculate their assets and liabilities are their fair values. Here fair value means current market based hypothetical value.
Important role of FVA in promoting relevance and reliability in accounting measurements:
Fair value accounting is widely using in pacific as it reliable and helps in improving the profitability of entities. This helps in building trust among investors and other stakeholders trust the financial statements.