The fair value dilemmas
The fair value dilemmas

Summary/Abstract: The author attempted to give an answer to a question why the concept of fair value is so much controversial. Observation of the Polish and international economic practice allows, in the author’s opinion, stating that the concept of assets measurement in fair value itself is not controversial. It is the purpose of fair value measurement that causes different, extreme opinions. Based on deceitful financial reporting, it is possible to state that it constitutes a way of manipulating financial information. Managers choose measurements methods so that a financial result is a sufficient basis for their activities’ evaluation. It makes the financial result (profit) and the value of a company (measured by owners’ equity) not a result of business activity but a result of made decisions (the choice of a measurement method which results in a more attractive net financial result). The financial result (and resulting company’s value) is an estimate. This is stirring up controversy as this could be considered unethical behavior which jeopardizes investors’ interests. This value has no confirming (legitimizing) attribute and no neutrality attribute either.

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