Fair value or not fair value: The loan is the question

摘要

In one, a bank lends money to someone to buy a house or to start a new business. In the second, a company raises debt financing to finance a new investment.rnAt first glance, these two situations seem pretty common and standard. Consequently, the general public could think that the accounting for these situations should be pretty un-controversial and straightforward.rnHowever, anyone who is familiar with recent accounting debates is aware that this is far from being the case. These are two of the most controversial items when the issue of accounting for financial instruments is examined. Moreover, they are at the heart of me conflicting areas of the convergence process put in place by the Financial Accounting Standards Board and the International Accounting Standards Board, which is due to be completed by 2011.