Intermediate Accounting Project Essay Example | Topics and Well Written Essays - 500 words

Intermediate Accounting Project - Essay Example aturity by enterprises reported at amortized cost, trading securities which are debt and equity securities reported at fair value with earnings including the unrealized gains and losses and bought and held primarily for selling, and available-for-sale securities which are debt and equity securities reported at fair value with unrealized gains an losses excluded from earnings serving as a separate component in shareholder’s equity and which are neither classified as held-to-maturity securities or trading securities. The statement was mainly in response to the concerns expressed by the regulators and other financial market players related to the recognition and measurement of investment in debt securities, most specifically the ones held by financial institutions. Despite providing the various standardized procedures related to debt and equity, there were certain issues that came to surface with FAS 115. The fair value measurements application in the financial reporting by all the statements of Financial Accounting Standards differed among the various dozens of pronouncements that necessitated a fair value measurement. As the time passed by, these different financial statements referring to different accounting concepts created various inconsistencies in applying the fair value measurements, thus meaning no standardization provided to the financial market. These inconsistencies and worries of the preparers of the financial statements regarding calculating the fair values in absence of the quoted market prices brought in the Accounting Standards Codification 820 (ASC 820). This coding is an umbrella under which all the various standards are pooled up, thus leading to easy referencing and maintaining of the most up to date records. This coding according to FASB would bring in increased consistency, reliability and comparability to the financial reporting. This coding was required because it simplifies access, improves accuracy of the research, alleviates risk of