Deconstructing the Accounting Standard AASB 13 Fair Value: Exit vs Entry Price for Assets

Kirsty Dunbar; Gregory Laing

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Deconstructing the Accounting Standard AASB 13 Fair Value: Exit vs Entry Price for Assets

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Deconstructing the Accounting Standard AASB 13 Fair Value: Exit vs Entry Price for Assets

Kirsty Dunbar and Gregory Laing

Journal of New Business Ideas and Trends, Vol.15(2), pp.12-19

2017

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Abstract

Business and Management

AASB 13

fair value

accounting standards

Purpose: This paper examines the flaw in the cost price valuation technique espoused in AASB 13 as an optional method for determination of fair value of an asset. Design/methodology/approach: This study employs the Deconstruction approach to the analysis and identification of theoretical perspectives imbedded with in the accounting standard that are internally contradictory. Findings: The analysis highlights the existence of contradictions in the inclusion of the cost price valuation technique (entry price). With the technique being in complete contradiction to the definition of fair value stated in the standard. Since both cost price and market price (exit price) valuation techniques require the existence of a market additional criticism is made of the lack of any explanation to justify the use of one method over the other. Research limitations/implications: The analysis provides some insight into the theoretical basis behind the two valuation techniques in view of the conceptual frameworks intended position of providing more useful financial information. This leads to speculation that rather than improving the information content of the financial statements the lack of consistency may conversely distort the financial information. [ABSTRACT FROM AUTHOR], Copyright of Journal of New Business Ideas & Trends is the property of Australian Business Education Research Association and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract.

Details

Title: Deconstructing the Accounting Standard AASB 13 Fair Value: Exit vs Entry Price for Assets
Authors: Kirsty Dunbar (Author) - University of the Sunshine Coast - Faculty of Arts, Business and Law
Gregory Laing (Author) - University of the Sunshine Coast - Faculty of Arts, Business and Law
Publication details: Journal of New Business Ideas and Trends, Vol.15(2), pp.12-19
Publisher: Australian Business Education Research Association
Date published: 2017
ISSN: 1446-8719
Organisation Unit: School of Business and Creative Industries; University of the Sunshine Coast, Queensland; USC Business School - Legacy
Language: English
Record Identifier: 99450994302621
Output Type: Journal article

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