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Causes of financial crisis: fair value accounting and market

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What are the possible causes of financial crisis- fair value accounting and marking to market? Can you briefly address myths developed by misconceptions of fair value and historical cost accounting?

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The expert determines the possible causes of finance crisis, the fair value accounting and marking to market.

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The mark-to-market accounting basically sets or marks assets on an organization's balance sheet so that they accurately reflect the sales price they would fetch in the market (Dumortier, 2008). Concurrently, fair value accounting is the amount with which either assets or liabilities can be exchanged at between two parties-this is the observed market price within an active market setting. In the absence of the active market, the fair value becomes the estimate of the actual value in use (Donker, 2005).

Given these two definitions, the ...

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