The disadvantages and advantages of historical cost accounting measurement system.. FASB tried to come up with some solutions to these problems by developing the fair value measurement system.

Discuss the contemporary challenges facing the fair value accounting measurement system and put forward your suggestions to solve these challenges. Use, among others

, Sung Gon Chung, Cheol Lee, and Santanu Mitra (July 2016). Fair Value Accounting and reliability: The Problem with Level 3 Estimates. The CPA Journal.

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Research has shown that the adoption of the fair value accounting measurement system has created a new set of challenges that the business community didn’t have to deal with before. These effects are more evident in firms that have poor corporate governance. In markets where the financial statements play a significant role in contracting and not just as a source of information, these effects are more manifest. As a result, investors may be misled to invest in less promising institutions. This is contributed to by the fact that the fair value estimation is an objective process. The process should…

 

(350 words)