Český finanční a účetní časopis 2016(1):49-65 | DOI: 10.18267/j.cfuc.467

Fair Value: Differences in approach to the value under financial accounting and asset valuation

Roman Čibera

Ing. Roman Čibera; Katedra financí a oceňování podniku, Vysoká škola ekonomická v Praze, nám W. Churchilla 4, 130 67 Praha 3; <xcibr03@vse.cz>.

For the purpose of transparency and repeatability, a standardization of processes in financial accounting and assets valuation is a long-term trend. The process of standardization within both of these fields takes place relatively separately, which causes some problems. One of possible problems is that within different standards the same terms are defined in different ways. Just one such an example is more deeply examined in this text. The difference of the definition of fair value within IFRS and IVS being used in practice can lead to a lot of misunderstandings. This text compares the approach to the fair value within both of the standards, points out impacts of the difference during practical use of standards. Furthermore there is an examination based on analysis of 2014 annual financial reports of sample of 24 companies listed on the Prague Stock Exchange regarding extent and quality of application of the standard IFRS 13 aiming to find out attitude of users of IFRS 13 to the definition framework of fair value. The examination leads to the result that application of IFRS 13 by these companies doesn't correspond to the requirements of the standard.

Keywords: Fair value; Financial accounting; Assets valuation; Standards of value; Standardization; Market value.

JEL classification: G30

Published: March 1, 2016  Show citation