Blog 9/28/14: About Why “Fair Value” Is the Rule

“Why “Fair Value” Is the Rule” is an article written by Karthik Ramanna. Ramanna states that fair value accounting is on the ascent.

http://hbr.org/2013/03/why-fair-value-is-the-rule/ar/1

The article’s main audience appears to be the general public. The article is not written with extremely difficult terms, nor is it intended for small children. I would argue that this article is at a medium level of difficulty.

The article is a public accounting academic article. It is not specifically for accountants, and it is informational. The article provides well thought out points that could be useful to a variety of persons. Students, accountants, highly curious people, and others who are researching the idea of fair value accounting could find this article to be of use.

In a different genre I would expect this article to be vastly different. If this article were intended for fiction, or comic, or children, I would expect a more entertaining aspect to it. However, for the genre that this article is classified in, I believe the aspects are accurately stated.

Ramanna addresses the counterargument , “the accounting basis-whether fair value or historical cost-affects investment choices and management decisions” in the third paragraph of the article. He then adds that fair value accounting is the supposable blame for “dubious practices” in the leading up to the famous Wall street crash. Ramanna then states that some have connected failures with bankers and managers versus fair value accounting. Finally, he concludes the argument by stating that fair value accounting was not the root of the problem, but instead a catalyst.

I, personally, found the article to be very informational as well as well thought out. The setup for the organization was well thought out, and it flowed smoothly. I would highly recommend that anyone read Ramanna’s article.

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