In particular, the use of the SFAS 157 accounting policy differs in its application for the banking industry and investment companies. Recent bouts of credit crises have ended in lasting implications in which financial instruments have stringent regulations. International accounting standards demand that certain procedures get disclosure in the accounting and valuation of financial instruments and securities. The standards are highly specific on fair value measurements for different classes of financial instruments. The objective of this report is to debate the differences in accounting for financial instruments and securities in investment companies and banking corporations with regard to SFAS 175 (ASC 820-20). Advancements in economic perspectives are responsible for the unprecedented increase in the use of financial instruments. Therefore, accounting regulations bodies have had to come up with policy guidelines to keep pace with these changes. Policy changes in regulation of financial instruments will continue to affect the industry for many years to come. An intriguing and somewhat challenging issue pertaining to the use of financial instruments and securities is the difference in their usage across a range of industries. SFAS 157, on fair value measurements, seeks to fill this important role and resolve any obstructing issues. This paper discusses how the financial reporting standard varies for the investment and the banking industries. SFAS 157 (ASC 820-10) Fair Value Measurements The fair value measurement standard, which came into force in 2006, seeks to provide a unified framework that offers greater consistency in application of fair value measurement guidelines (J.P. Morgan, 2).SFAS 157, Fair Value Measurement, defines fair value, outlines a framework for its measurement through levels, and expands disclosures relating to fair value. The accounting statement provides a major pronouncement to the measurement of fair value for financial instruments, and its effects spread to several corporate entities. The broad mandate of the SFAS 157 is to increase disclosure requirements for fair value measurements. IFRS standards require that the measure on securities be at fair value. Previously, accounting regulations on measurement of value for financial instruments were scattered and inconsistent, and the Fair Value Measurements guidelines’ intention was to lay a foundation for all fair value measurements, disambiguate the term ‘fair value’, and enhance disclosures falling under the fair value categorization (Deloitte, 7). To some extent, the disclosure of the financial instrument values and particularly securities differs with the industry type, notably for the banking and the investment industry. Terms on Fair Value Measurement In SFAS 157, fair value is the price at which an asset is saleable or transferrable between participants in the market at the date the measurement takes place (J.P. Morgan, 3). Inputs can either be observable and unobservable, where the observable inputs are indicative of the market conditions and the unobservable inputs indicate the company’s perspective on the price of an asset. An active market is one where daily price is obtainable and the fair value is easy to obtain without reliance on forecasting models or other forms of adjustments. Accounting for Financial Instruments and Securities Financial instruments are negotiable cash instruments with a certain financial worth. Financial instruments give an entity the right to receive or the commitment to provide cash or another financial instru
Advancements in economic perspectives are responsible for the unprecedented increase in the use of financial instruments. Therefore, accounting regulations bodies have had to come up with policy guidelines to keep pace with these changes…
In case of trade and business, the world economies have experienced tremendous growth. The policy makers realized the necessity of interdependence and co-operation in encouraging the international trade. International trade has a number of advantages like exchanges of necessary resources.
Table of Contents
1. Introduction to Goldman Sachs 3
1.A. Goldman Sachs History 3
1.B. Goldman Sachs Background 3
1.C. Role in the World of Investments 4
2. How Goldman Sachs Has Performed in the World of Investments 7
2.A. Products and Services Provided by Goldman Sachs to the Market 7
The execution and implementation of the accounting standards are needed which should be done by effective corporate governance and strong internal control. Due to the integration of the world’s capital market, a single set of accounting sets are logical and need of the hour which will help in comparing the information related to finance and thereby would enhance the efficiency of the allocation of resources across the border.
With this change due to globalization, the thought process of people has also significantly influenced and they have realized their priorities.The policy makers realized the necessity of interdependence and co-operation in encouraging the international trade.
Introduction The global business is changing rapidly due to the certain factors like competitions, technological advancement, international expansion of markets etc. All these factors are mainly led by process of globalisation which has brought a number of development as well as complexities in the human life including trade and business.
Social and environmental accounting is a contemporary component of accounting principles and standards. It goes beyond the formal record keeping and financial reporting to encompass internal and external information demands by accounting stakeholders in the economies.
There are three methods of consolidation i.e. the fair value method, the equity method and the consolidation/ acquisition method. The choice of the method to use entirely depends on the proportion of ownership of the subsidiary company. Accountants in consolidating their
But surveys also tell that those banks will face serious challenges to cope with changing trends of global financial systems. Flexibility and efficiency scalability will be under serious threats if their IT
A new system, involving the use of accounting software, has been discovered and implemented. The use of accounting software has significantly aided the storage and processing of the accounting information system in the banking sector
4 pages (1000 words)Term Paper
Get a custom paper written by a pro under your requirements!
Win a special DISCOUNT!
Put in your e-mail and click the button with your lucky finger
Apply my DISCOUNT
Got a tricky question? Receive an answer from students like you!Try us!
Didn't find an essay?
Contact us via Live Chat, call us at +16312120006or send an email to firstname.lastname@example.org