Sample Essay
The ideology presented in the article highlights the use of assumptions for realising probable future losses of banks and recording assets and liabilities at historical costs.
The strategy of applying fair value measurement in valuing and recording balance sheet items is quite promising but detailed interpretations are required for valuing several assets and liabilities especially level 3 assets which do not have an underlying market which can be used as a reference for valuation purposes. It is correctly identified in the article that regulators and standard setting bodies need to learn from the past and outline regulations and standards which can be used to present realistic values.
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