Jurnal Umum
Harmonization, Comparability, and Fair Value Accounting
In this paper, we focus on the relationships between international accounting
harmonization (IAH) and the paradigm of Fair Value Accounting
(FVA). Accountants rely on the accounting concept of comparability in
defining IAH and are in agreement that a set of internationally implemented
Generally Accepted Accounting Principles (GAAP) is required
for a ‘‘complete harmonization.’’ We argue, however, that a second
requirement—a common denominator for measuring, recording, and
reporting business transactions, assets, liabilities, and equities—is necessary
to reach a state of a ‘‘complete IAH.’’ We explain the logic behind
the requirement of a common denominator and assert that IAH is feasible
under the paradigm of FVA, but not under that of Historical Cost
Accounting (HCA). This is true because the concept of fair value, but not
historical cost, provides the common denominator necessary for a meaningful
comparison of accounting data. We then argue that the paradigm of
FVA acts as a catalyst in a harmonization cycle: FVA propels IAH and
IAH provides more relevant information that may foster the efficiency of
global markets, which improves the quality of the FVA figures.
Keywords: harmonization, comparability, fair value accounting
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