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How is Fair Value Accounting different from Historical Cost Accounting? What are the advantages and disadvantages of each system. Are there instances when GAAP uses Fair Value Accounting? If yes, when?
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Running head: ACCOUNTING DISCUSSION:
ACCOUNTING DISCUSSION
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1
How is Fair Value Accounting different from Historical Cost Accounting? What are the
advantages and disadvantages of each system? Are there instances when GAAP uses Fair Value
Accounting? If yes, when?
Historical cost these are methods of recording price over a certain value
How is Fair Value accounting different from Historical Cost Accounting?
According to Duska, Duska, & Kury, (2018), while comparing fair value to historical cost, fair
value is typically considered to be more relevant to the intended users to general purpose
financial reports.
An exception is certain an exception in stocks and bonds that are actively traded on stock
exchange.
An example is ...
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