Mark to market Vs Historical Costs

Related BrainMass Solutions

• Describe each of the primary methods used for setting price

  Consumer's and competitor's role and importance is ignored historical accounting costs is used rather than replacement value use of "normal" or "standard" output level to allocate fixed costs inclusion of sunk costs rather than just using incremental

• Domestic Employment, Standard of Living, Mark to Market

  Mark to market allows for adjustments to assets based on fair market value of the asset and not on historical cost, which isn't accepted as majority part of GAAP.

• Describe what is the rationale for disclosing assets separately on the balance sheet?

  - no they can't - how would you keep track of short term vs. long term? - how would you keep track of historical vs. market prices? - how would you keep track of depreciation?

• Applicable Methods of Depreciation

  What other assets should be shown at FMV compared to historical costs and why? (1) a. Depreciation per unit produced.

• Analysis of Investing Activities

  3.Compare these amounts to those that would be reported if no investments were sold. 4.Does this example help explain why mark-to-market accounting is often required by GAAP?

• Causes of financial crisis: fair value accounting and market

  Mark-to-Market Accounting: What you Should Know.

• Accounting reporting criteria

  240351 Accounting reporting criteria The historical cost vs fair market value relating to national and international companies. There are four components. 1. Defining historical cost 2.

• Examples of what makes historical cost irrelevant

  Historical cost does not impact future costs. The only time it can be relevant is when computing the gain or loss on disposal and that impacts income taxes payable.

• Valuation problems financial assets: Apples and Oranges

  And, mark to market is really a liquidation value - what you could get if you sold it.