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1. The argument among accountants and financial statement users over the proper valuation procedures for...

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Accounting

1. The argument among accountants and financial statement users over the proper valuation procedures for assets and liabilities resulted in the release of SFAS No 115. Both historical cost and current value accounting have critics and each can cause financial statements to not be faithfully represented.
a. Determine how current values might be determined for investments, land, buildings, equipment, patents, copyrights, trademarks and franchises.
b. How might the use of current values in the accounting records cause earnings volatility?
c. Discuss how management might manage earnings using current cost data.
d. How do the requirements established in SFAS 157 affect the use of fair value measurement in financial statements?

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