Open AccessThe FASBs Concepts Statement On Cash Flows And Present Value
Author(s) -
Stanley C. Martens,
Thomas Berry
Publication year - 2011
Publication title -
journal of applied business research
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.149
H-Index - 22
eISSN - 2157-8834
pISSN - 0892-7626
DOI - 10.19030/jabr.v19i4.2186
Subject(s) - cash flow statement , fair value , accounting , cash flow , financial statement , statement (logic) , financial accounting , asset (computer security) , liability , statement of changes in financial position , value (mathematics) , income statement , business , construct (python library) , economics , actuarial science , accounting information system , balance sheet , mathematics , computer science , audit , law , political science , statistics , computer security , programming language
In February 2000, the Financial Accounting Standards Board (FASB) issued Statement of Financial Accounting Concepts No. 7, Using Cash Flow Information and Present Value in Accounting Measurements. In this document the FASB asserts without proof that a present value computation along its lines will provide a good estimate of the fair value of an asset or liability. Using numerical examples provided by the FASB, we attempt to construct arguments in support of the FASB’s claim. We find that such arguments require strong and not at all obvious assumptions about players in hypothetical markets.