Conjectures Regarding the Adoption of Fair Value Measurements in Brazil

Abstract

The issue of relevance versus reliability has always been a debate in accounting. Far from being a consensus among the community, the adoption of fair value measurements is intended to present a more realistic view of an entity¿s financial position. However, it could also cause a loss of credibility due to the subjectivity inherent in the valuation process. Wishing to make a contribution to the existing literature on this issue, this paper presents a discussion about the adoption of fair value measurements in Brazil. First, we present a brief examination of asset and liability valuation using the accounting theory as a framework. Following, we conduct a review of the International Accounting Standards Board (IASB) and the Financial Accounting Standards Board (FASB) standards regarding fair value measurements. Empirical studies addressing fair value are also reviewed. Finally, a discussion about its implementation is presented, aiming to take into account the specificities of the Brazilian Market. This paper intends to contribute to the construction of academic knowledge in accounting by debating an issue which is a real problem for organizations, and yet incipient in the national literature.