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Fair Value: Differences in approach to the value under financial accounting and asset valuation


  • Roman Čibera


For the purpose of transparency and repeatability, a standardization of processes in financial accounting and assets valuation is a long-term trend. The process of standardization within both of these fields takes place relatively separately, which causes some problems. One of possible problems is that within different standards the same terms are defined in different ways. Just one such an example is more deeply examined in this text. The difference of the definition of fair value within IFRS and IVS being used in practice can lead to a lot of misunderstandings. This text compares the approach to the fair value within both of the standards, points out impacts of the difference during practical use of standards. Furthermore there is an examination based on analysis of 2014 annual financial reports of sample of 24 companies listed on the Prague Stock Exchange regarding extent and quality of application of the standard IFRS 13 aiming to find out attitude of users of IFRS 13 to the definition framework of fair value. The examination leads to the result that application of IFRS 13 by these companies doesn’t correspond to the requirements of the standard.

Suggested Citation

  • Roman Čibera, 2016. "Fair Value: Differences in approach to the value under financial accounting and asset valuation," Český finanční a účetní časopis, University of Economics, Prague, vol. 2016(1), pages 49-65.
  • Handle: RePEc:prg:jnlcfu:v:2016:y:2016:i:1:id:467:p:49-65

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    References listed on IDEAS

    1. John A. Enahoro & Jumoke Jayeoba, 2013. "Value Measurement and Disclosures in Fair Value Accounting," Asian Economic and Financial Review, Asian Economic and Social Society, vol. 3(9), pages 1170-1179, September.
    2. Edward J. Riedl & George Serafeim, 2011. "Information Risk and Fair Values: An Examination of Equity Betas," Journal of Accounting Research, Wiley Blackwell, vol. 49(4), pages 1083-1122, September.
    3. Mihai Ristea & Ionel Jianu, 2010. "Dynamics Of The Fair Value In Accounting," Analele Stiintifice ale Universitatii "Alexandru Ioan Cuza" din Iasi - Stiinte Economice, Alexandru Ioan Cuza University, Faculty of Economics and Business Administration, vol. 2010, pages 69-83, july.
    4. Andrea Menini & Michel Magnan & Antonio Parbonetti, 2011. "Fair Value Accounting: Information or Confusion for Financial Markets?," CIRANO Working Papers 2011s-56, CIRANO.
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    More about this item


    Fair value; Financial Accounting; Assets valuation; Standards of value; Standardization; Market value; Fair value; Finanční účetnictví; oceňování aktiv; Standardy hodnoty; Standardizace; Tržní hodnota;

    JEL classification:

    • G30 - Financial Economics - - Corporate Finance and Governance - - - General


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