Fair Value Accounting

Definition:

An accounting term. A value measurement approach where assets and liabilities are remeasured periodically to reflect changes in their value, with the resulting change impacting on either net income or other comprehensive income for the period. In general, this approach generates a Balance Sheet that better reflects the current value of assets and liabilities, although there is greater volatility in periodic reported performance caused by changes in fair value. As applied to quoted securities, such as stocks, bonds, and commodities, Fair Value Accounting is also referred to as Mark-to-Market Accounting.

See also Periodic Reports.

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