The role of accounting in the global financial crisis. Assumptions and realities
AbstractThe financial crisis prompted some players to denounce the role of financial markets "fair value accounting" required by the accounting rules used by the major listed companies in the world, U.S. GAAPs in the U.S. and IFRSs in Europe. This paper is related to the link between accounting and the global financial crisis. As technical research, we use the procedure of reviewing the literature. The criticism of fair value accounting are considering in particular two problems: the lack of liquidity (as may be assessed on the balance sheet financial instruments not traded in the market) and the pro-cyclicality (emphasizing the economic phases of expansion and recession). These difficulties are real, but the solutions offered - temporary or permanent modification of existing rules in order to limit the scope of this method of accounting – are not at all convincing. Although it is easy to identify gaps in fair value is still more difficult to propose an alternative option to respond more effectively to the requirements of relevance, reliability, comparison and understanding necessary for financial accounting rules In particular, the reference to historic price, often raised, would provide more than comparable and much less relevant.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoArticle provided by Danubius University of Galati in its journal Euroeconomica.
Volume (Year): (2011)
Issue (Month): 29 (August)
financial crisis; accounting rules; fair value; historical cost;
You can help add them by filling out this form.
reading list or among the top items on IDEAS.Access and download statisticsgeneral information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Florian Nuta).
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.