Considering a market value-based approach to financial reporting measurement

A market value-based theory of financial reporting measurement is proposed and presented as a call for further study and discussion among accountants.

Get your downloadable electronic copy.

Download Now

Multiple theories for financial reporting measurement have emerged over the years, but there has not been a lot of informed debate on how these consider market pricing theories and evidence. Our paper proposes an approach in which current market value plays a critical role in financial reporting measurement for for-profit organizations.

Expand your understanding of current market value

With this comprehensive document, you will learn about the fundamental principles and dimensions of one market value-driven theory of financial reporting measurement, including:

  • basic and strategic accounting premises
  • a clear definition of current market value
  • how current market value plays a primary role in measurement

Based on the premise that businesses transform market input values into market output values, this current market value theory features six main principles that deal with the following areas:

  • business operating assets
  • business operating liabilities
  • investing and financing assets and liabilities
  • impairment

Additional features

  • addresses the implications of this theory for disclosures and capital maintenance
  • an extensive appendix with further discussion on the features, strengths, weaknesses, implications and feasibility of current market value measurement
  • comparisons with other measurement approaches

Broaden your knowledge

By reviewing this document, you will:

  • gain a big picture understanding of how current market prices affect financial reporting
  • gain insights that may improve accounting methods for your organization
  • be in-the-know on current thinking and ideas related to financial reporting measurement