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Responded to the post, and be respectful in your discussion. Healthy debates are welcomed. Be sure to maintain academic rigor and professionalism at all times.In the article I chose, the author believes that fair value is the most desired accounting method. Fair value is the market price of an asset or liability (what the asset or liability is worth), while historical cost is the cost the asset or liability was originally purchased for. The author does note that the historical cost method is easy to use and simple to understand, however, they state the the fair value gives a better idea of the value of an asset or liability.Fair value accounting causes companies to be more aware and transparent of their reporting. This could mean that a company could potentially overstate their assets or understate their liabilities. It also encourages the person to be more ethical by following the method closely, and giving accurate information. This would include not holding out on any information.I do agree to a certain extent with this opinion. I think there might be certain exceptions to the rule. For instance, if I purchased a $5 book, then all the sudden the book got very popular and the prices raised to $20, would it be worth the trouble of court? I haven’t had any hands on accounting experience, but I think that I would prefer the fair value method. I think reporting assets and liabilities at the value in which they are worth at the time is a great source of information to investors.References:Jaijairam, P. (2012). Fair Value Accounting vs. Historical Cost Accounting. Review of Business Information Systems (RBIS), 17(1), 1–6. https://doi.org/10.19030/rbis.v17i1.7579
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