IDEAS home Printed from https://ideas.repec.org/a/pcz/journl/v4y2011i1p135-150.html
   My bibliography  Save this article

Historic Cost Versus Fair Value

Author

Listed:
  • Mariana Man

    (the University of Petroaani, Romania,)

  • Bogdan Rivas

    (the University of Petroaani, Romania,)

  • Liana Gadau

    (the “Valahia” University of Targoviste)

Abstract

The value of accounting registering based upon historic cost is a sure and checkable value, written in a document that certifies a property right upon a certain good, a debt right or a debt. Historic costs’ evaluation consists in registering goods in-comings into the company’s patrimony at their buying cost, namely their historic cost, with no further modification although the real value changes. Fair value is the foundation of IFRS referential which displays basic principles, largely inspired by US GAAP, although they are not mentioned by them. Fair value evaluation is opposed to the principle of prudence, one of the main principles of French accounting law (also taken over by Romanian accounting standards) owing to which only possible losses are registered while potential profits are ignored. The issues that occur refer to the impact of the evaluation according to the fair value upon the accounting data of the company, namely upon the balance sheet and the results account drawn out on the basis of the fair value registrations. At the same time, the evaluation according to the fair value has determined a new foundation in displaying a company’s performance. This issue determines the following question: “Which is closer to the truth and more credible? A result calculated according to the fair value or one which is founded upon historic cost?”

Suggested Citation

  • Mariana Man & Bogdan Rivas & Liana Gadau, 2011. "Historic Cost Versus Fair Value," Polish Journal of Management Studies, Czestochowa Technical University, Department of Management, vol. 4(1), pages 1-238, September.
    • Handle: RePEc:pcz:journl:v:4:y:2011:i:1:p:135-150
    as

    Download full text from publisher

    File URL: http://www.pjms.zim.pcz.pl/PDF/PJMS4/HISTORICCOSTVERSUSFAIRVALUE.pdf
    Download Restriction: no
    File URL: http://pjms.zim.pcz.pl/historic-cost-versus-fair-value.php
    Download Restriction: no
    ---><---

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. ION Elena Iuliana & MAN Mariana, 2017. "Assessment Of The Company'S Performance In Terms Of Gains And Losses From Revaluation Of Fixed Assets Recorded In Equity," Revista Economica, Lucian Blaga University of Sibiu, Faculty of Economic Sciences, vol. 69(2), pages 98-108, August.
    2. Mariana Man & Maria Ciurea, 2016. "Transparency of Accounting Information in Achieving Good Corporate Governance. True View and Fair Value," Social Sciences and Education Research Review, Department of Communication, Journalism and Education Sciences, University of Craiova, vol. 3(1), pages 41-62, May.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:pcz:journl:v:4:y:2011:i:1:p:135-150. See general information about how to correct material in RePEc.

    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.

    We have no bibliographic references for this item. You can help adding them by using 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 RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Paula Bajdor (email available below). General contact details of provider: https://edirc.repec.org/data/wzpczpl.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.