Fair Value Accounting Essay Example for Free

Fair Value Accounting Essay This paper attempts to answer the question: â€Å"Is it reasonable to blame fair value accounting for any of the Wall Street mess? † This paper in effect settle whether the use of fair value accounting by listed companies in the major stock exchanges in the US, particularly those found in Wall Street, which the caused fall in prices of the stocks of these companies, was required of companies without justification; hence, it should be blamed for the mess. 2. Analysis and Discussion Any mess in the Wall Street is defined for this paper as one causing the stock prices of companies list in major stock exchanges of the US to fall and that it resulted to losses to investors. To have reasonable basis to blame fair value accounting for any Wall Street mess, does not simply mean that fair value accounting was the necessary cause of fall in the prices of corporate stocks but that the requirement of fair value accounting must not be fair. The question that must be decided therefore is whether fair value accounting is fair as basis of valuing corporate assets, liabilities and equity. A situation or condition is fair if it gives what is due to a person. If the concept of fair value is used in the context of an asset purchased or liability assumed in business, fair value implies that said asset or liability must neither be overpriced nor underpriced whether perceived or otherwise. The law of economics would have fair value as one representing that market price or that equilibrium price of a product or service (Samuelson and Nordhaus, 1992) which is also the value of something from a seller that is not forced to sell or from a buyer that is not forced to buy. Investors, creditors, and other persons expect to be treated fairly as they enter into transactions in terms of value that they will give in exchange to what they will receive. To illustrate, a person or company planning to invest in stocks will appreciate what is fair if the said person or company will earn sufficient return above cost of capital in exchange for the risks being faced by such person or company (Brigham, 2002). To have what is fair, the investors must know the accurate and reliable information about of the company to guide them about their chances of gaining or losing money. These users deserve to have the opportunity to have the true or accurate value of asset, liability or equity being dealt with in a business transaction as basis for valuing the stocks that they will invest with. Financial reports prepared companies, as guided by Financial Accounting Standards Board (FASB) accounting standard under fair value accounting, will provide these users the opportunity. Specifically, fair value accounting was made pursuant to FAS 157 as issued by US FASB for companies to reflect the accounting information on the real values of assets, liabilities and equity in the balance sheet as contrasted with presenting the information using the historical cost accounting (Meigs and Meigs, 1995). A group of analysts and portfolio managers actually formed part of those who influenced the passage of the fair value accounting for more relevant information in decision making (Chasan, 2008). Under FAS 157 defines fair value is defined as the price that would be received â€Å"to sell an asset or paid to transfer a liability in an orderly transaction between market participants in a measurement date† (Sortur, 2007). If companies have restated their financial statements from historical cost accounting to fair value accounting, the purpose was laudable since in simple terms, the intention is to make the information more relevant, more accurate and more reliable for decision makers. If stockholders got affected in terms of lower price of stocks as a result of restatement of financial statements, the error was when they were made the purchase of their investments under the historical cost accounting. Since fair value accounting may also increase the value of the stocks if fair value is higher than cost, it could not be asserted that it should be blamed for the fall of prices but not praised for increased in price increase of stock prices. 3. Conclusion It can be concluded that it is not reasonable to blame fair value accounting for any of the Wall Street mess since fair value accounting is only bringing out what is fair to investors who deserved to know accurate and reliable information for making decisions. Fair value accounting is an accounting standard made by FASB that was made as a requirement from the corporation which must present truthful and reliable information for investors. As an alternative to historical value of accounting, fair value is expected to have present company more reliable information about their assets and liabilities in accordance with market prices. Its implementation may have caused companies to present their financial information and if the information presented were more truthful, the consequence of causing problems to companies should only be secondary to the purpose of providing objective and more reliable financial information. Any fall in stock prices from Wall Street may in fact have been caused by companies having to restate their financial statement pursuant to fair value accounting but the intention was to reflect to truer value of assets and liabilities of the corporations whose stocks got affected. Losers should not blame fair value accounting since the latter is just a guide to have more truthful information and they would have a change also of higher stock prices under fair value if warranted by market forces. If there was no basis for such more truthful information, then restatements of financial information using fair value would not have been made in the first place. If buyers and sellers are not being compelled to complete their transaction, fair value accounting must be held as fair and cannot be blamed for the mess. In fact, fair value accounting should have been introduced years ago for it could have saved some abuse and a lot of problems (Rees-Mogg, 2007). References: Brigham and Houston (2002), Introduction to Financial Management, Thomson-South Western, USA, 2002 Chasan, Emily (2008), Is fair value accounting really fair? {www document} URL, http://www. reuters. com/article/reutersEdge/idUSN1546484120080226, Accessed November 21, 2008 Meigs and Meigs (1995), Financial Accounting, McGraw-Hill, Inc, London, UK Rees-Mogg (2007), Why FAS 157 strikes dread into bankers, {www document} URL http://www. timesonline. co. uk/tol/comment/columnists/william_rees_mogg/article2852547. ece, Accessed November 21, 2008. Samuelson and Nordhaus (1992), Economics, McGraw-Hill, Inc, London, UK Sortur (2007) Fair Value Measurement, The Chartered Accountant {www document} URL, http://icai. org/resource_file/96471564-1574. pdf, Accessed November 21, 2008

Dostoevsky and Psychology :: Biography Biographies Essays

Dostoevsky and Psychology "A sick man's dreams are often extraordinarily distinct and vivid and extremely life-like. A scene may be composed of the most unnatural and incongruous elements, but the setting and presentation are so plausible, the details so subtle, so unexpected, so artistically in harmony with the whole picture, that the dreamer could not invent them for himself in his waking state. . . "1 Fyodor Dostoevsky's remarkable insight into the psychology of man is seen here in the development of Raskolnikov's dream on the beating of a horse by drunken peasants. The dream is significant on several planes, most notably in the parallel of events in the dream with Raskolnikov's plan to murder the old pawnbroker. It also serves as perhaps the most direct example of the inseparable tie between events of the author's life with the psychological evolution of his protagonists, as well as lesser characters, through the criminal minds of Raskolnikov, Rogozhin, Stavrogin, and Smerdyakov, and into the familial relationships of The Brother's Karamazov.2 Traditional interpretation of literature from a psychoanalytic standpoint has relied extensively upon the work of Sigmund Freud. In the case of Dostoevsky, however, this method is both anachronistic and inadequate. Dostoevsky's great works, considered individually or holistically, though fictional, established him as one of the forefathers of psychoanalysis, and a predecessor to Freud.3 Indeed Freud himself acknowledged that "the poets" discovered the unconscious before he did,4 stating further in a letter to Stefan Zweig, "Dostoevsky 'cannot be understood without psychoanalysis- i.e., he isn't in need of it because he illustrates it himself in every character and every sentence.'"5 There is, however, a complementary relationship between Dostoevsky and Freud brought about through the striking clinical accuracy of psychological traits exhibited both individually in Dostoevsky's characters, as well as in reflecting the author's own mental processes. Thus, it is necessary first to exami ne Freud as a point of departure before looking at modern alternatives of psychoanalytical method. Freud on the Oedipus complex Epileptic seizures plagued Dostoevsky throughout the last thirty-four years of his life, occurring about once a month on average, and consisting of "A brief, intensely exalted, premonitory sensation, loss of consciousness, convulsions, and a lingering depression with vague feelings of criminal guilt for three to eight days."6 Freud delves into the psychological roots of this illness in his essay "Dostoevsky and Parricide", calling into question Dostoevsky's "alleged epilepsy". "It is highly probable", he states, "that this so-called epilepsy was only a symptom of his neurosis and must accordingly be classified as hystero-epilepsy- that is, as severe hysteria.

Statistics: Variance and Vanguard Total Stock

Statistics Midterm paper 1. : Identify the implied population in the information here. Government agencies carefully monitor water quality and its effect on wetlands (Reference: Environment Protection Agency Wetland Report EPA 832-R-93-005). Of particular concern is the concentration of nitrogen in water draining from fertilized lands. Too much nitrogen can kill fish and wildlife. Twenty-eight samples of water were taken at random from a lake. The nitrogen concentration (milligrams of nitrogen per liter of water) was determined for each sample. The variable in this information is nitrogen concentration (mg nitrogen/l water). a. number of fish b. samples of water taken at random c. the wetlands d. nitrogen concentration (mg nitrogen/l water) in the entire lake e. government agencies 2. Find the technique for gathering data in the study below. A study of all league football scores attained through touchdowns and field goals was conducted by the National Football League to determine whether field goals account for more scoring events than touchdowns (USA Today). a. sampling b. census c. experiment d. simulation . observational study 3. It's not an easy life, but it's a good life. Suppose you decide to take the summer off and sign on as a deck hand for a commercial fishing boat in Alaska that specializes in deep-water fishing for ground fish. What kind of fish can you expect to catch? One way to answer this question is to examine the reports on ground fish caught in the Gulf of Alaska. The following list indicates the types of fish caught annually in thousands of metric tons: flatfish, 36. 3; Pacific cod, 68. 6; sablefish, 16. 0; Walleye Pollock, 71. 2; rockfish, 18. 9. Make a Pareto chart showing the annual harvest for commercial fishing in the Gulf of Alaska. 4. How hot does it get in Death Valley? Assume that the following data are taken from a study conducted by the National Park System, of which Death Valley is a unit. The ground temperatures were taken from May to November near Furnace Creek. Compute the mode for these ground temperatures. 147 153 167 174 182 178 179 182 178 178 167 0 153 144 a. 144 b. 182 c. 167 d. 153 e. 178 5. Find the sample variance s2 for the following sample data. Round your answer to the nearest hundredth. x: 23 17 12 35 29 . 84. 20 b. 67. 36 c. 101. 00 d. 88. 84 e. 126. 25 6. Do bonds reduce the overall risk of an investment portfolio? Let x be a random variable representing annual percent return for the Vanguard Total Stock Index (all Stocks). Let y be a random variable representing annual return for the Vanguard Balanced Index (60% stock and 40% bond). For the past several years, assume the following data. Compute . x: 14 0 36 23 33 25 26 14 14 23 y: 6 5 26 17 24 17 17 5 6 6 a. 4607 b. 4803 c. 5332 d. 4243 e. 4940 Answers: Queston 1: The population is d. – the nitrogen population in the entire lake. Question 2: The technique is a census since all events are to be measured. Question 3. The Pareto Chart is below:[pic] Question 4: The mode is the most frequently occurring value in a set of data so here the mode is 178 so the answer is e. Question 5. The samplle variance is 84. 20 so the answer is a. Question 6. The mean return for the Vanguard Total Stock Index is 20. 8 while the mean return for the Vanguard Balanced Index is 12. 9 (with bonds). Based on this data you would conclude that bonds do not reduce the overall risk of an investment portfolio since the mean return was actually less when the porfolio has bonds in it.

Amazon s Marketing Plan For The Customer Essay - 2390 Words

Amazon is focused on the customer. â€Å"Our vision is to be earth’s most customer centric company; to build a place where people can come to find and discover anything they might want to buy online† (Bhasin, 1). Amazon has a clear goal of providing excellent customer service and offering a large variety of products for their customers to purchase. Amazon’s marketing plan should reflect their commitment to the customer. The popular e-commerce website—Amazon.com—demonstrates their vision â€Å"To leverage technology and the expertise of our invaluable employees to provide our customers with the best shopping experience on the internet† (Bhasin, 1). The website offers a customized online shopping experience where product suggestions reflect on the customer’s viewing and purchase history. Often a person does not want to go out and buy a product they want or need, so they can go on Amazon.com and make the purchase from the comfort of their home. Amazon provides a convenient and easy way to buy products online. Although Amazon sells a large assortment of products, what they actually sell is good customer service. Their product is giving their customers the best shopping experience. That means offering the product that the customer is looking for, making it easy to find and purchase on their website, and making the shopping experience customized to each individual customer. The price is virtually free for the customer. The customer only sees the price of the products thatShow MoreRelatedMarketing Plan For Amazon s Marketing Strategy1636 Words   |  7 Pagesproducts or services. This paper will successfully create and present a marketing campaign for Amazon. According to Amazon (n.d.), most people do not realize that Amazon, one of the world’s leading onli ne retailers, was founded 20 years ago in 1994. 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