Differences between fair value and the other five measurement attributes15

1 All fair value measurement attributes refer to the market value or the present value of future cash flows as the measurement attributes of assets and liabilities. Some people believe that the fair value measurement attribute will replace the historical cost measurement attribute that has been used for hundreds of years and become the most important measurement model in the 21st century.

Fair value is a measurement attribute of an accounting element measurement. Accounting measurement is the process of determining the amount of an accounting element that meets the recognition criteria by recording it in the accounts and presenting it in the financial statements. Enterprises shall measure the accounting elements and determine their amounts in accordance with the prescribed accounting measurement attributes.

The measurement attributes reflect the basis for determining the amount of accounting elements, mainly including historical cost, replacement cost, net realizable value, present value and fair value. Under the fair value measurement attribute, assets and liabilities are measured at the amount of the voluntary asset exchange or debt settlement between the parties to the transaction who are familiar with the situation in the arm's length transaction.

The current accounting measurement attributes are:

Historical Cost, Replacement, Net Realizable Value, Present Value, Fair Value Historical Cost: used for initial measurement, except for the initial measurement at fair value in individual cases, the principle of historical cost is applied, which is the most basic principle;

Fair value: Used for both initial and subsequent measurements. Mainly used for financial assets, financial liabilities, investment real estate;

Net realizable value: only for subsequent measurement, long-term assets to be disposed of, as well as current assets (mainly inventory), are measured using net realizable value, if the net realizable value is less than the book value;

Present value: only used for subsequent measurement, and the present value of the asset ready for long-term use is used;

Replacement cost: Accountants do not use replacement cost as the basis, and appraisers use replacement cost as the basis of valuation.

Contact: You are looking for Ha, and you will know Ha after reading the textbook of the 2008 CPA exam.

1. Historical costcash or cash equivalents paid at the time of acquisition of the asset, or at fair value of the consideration paid at the time the asset was acquired;

2. Replacement costcash paid for the purchase of identical or similar assets;

3. Net realizable valueRemember to deduct costs, sales fees, and taxes from the cash or cash equivalents that can be received from the external sale of assets;

4. Present valuePresent value measurement is measured at present value calculated by discounting future cash inflows after the date of measurement of the asset;

5. Fair valueOrderly transactions, determined by buyers and sellers in an arm's length and voluntary manner**.

Fair value measurement refers to the measurement of assets and liabilities according to the amount of money that market participants can receive or pay for the transfer of liabilities in the orderly transactions that occur on the measurement date. The main advantages of fair value measurement are that it adapts to the needs of financial innovation, makes accounting returns more real, is conducive to the capital preservation of enterprises, is more in line with the requirements of the matching principle, and improves the usefulness of information for decision-making.

There are three different types of calculation methods for fair value measurement: the market value method, the similar item method and the valuation technique method.

1. The market price method, the market, regardless of its value, is considered to be the best reflection of the fair value of assets and liabilities. The market price method refers to the fair value of the measured item as its fair value.

2. Similar project method. In the event that the market ** for the measured item cannot be found, the market ** for a similar item of the measured item can be used as its fair value. When applying the similar project method, the most important thing is to determine the similar project.

3. Valuation technique method, when an asset or liability does not exist or there is only little market information for fracturing, appropriate valuation techniques should be considered to determine the fair value of the asset or liability. The valuation technique is one of the most difficult to implement in the fair value measurement method, and it is also the most controversial and has the greatest impact on the objectivity of fair value measurement.

Answer]: a, b, c, e

There are four main ways to measure fair value: direct use of the available market**; If a market is not available, a recognized model should be used to estimate the market**; Actual payments** (there is no basis to prove that they are not representative); This type allows the use of company-specific distress data, which should be reasonably estimated and not in conflict with market expectations. Therefore, ABCE was chosen.

Answer]: a, b, c, d

The general approach to measuring the allowable value of the public disturbance plexus, which usually includes the direct use of the available market**; Estimating the market using the well-established Zhengyan model**; According to the actual payment of **, as long as it cannot be proved that the ** is not representative; Enterprise-specific data is allowed to be used, which can be reasonably estimated and closed and does not conflict with market expectations. Based on the historical cost of the asset at the time of acquisition is not a fair value measurement method. Therefore, ABCD is chosen.