An overview of fair value accounting

Accounting standard-setters of the world have already emphasized on the concept of Fair Value Accounting (FVA) and also implemented this concept in the accounting standards. There is a prominent controversy between fair value-based financial statements and historical cost-based financial statements regarding their contribution towards giving better view of the financial performance and position of a business to its stakeholders. Against this backdrop, the present paper sketches an overview of the fair-value based accounting system and concludes that there is an urgent need for introduction of uniform model of fair value measurement by making a joint effort by the leading accounting standard-setting bodies of the world in order to minimize discrepancies in financial reporting.