公允价值的解释及其利益关系外文翻译.docVIP

外文翻译 Explanation and Benefits of Fair Value Accounting Material Source: international securities industry association rules 1. Definition Fair value is an estimate of the price an entity would realize if it were to sell an asset, or the price it would pay to relieve a liability. Familiar with the situation of buyers and sellers in fair trading conditions are determined, and the price of the parties or association in fair trade under the conditions of an asset can be buying and selling price. In the fair value measurement, the assets and liabilities in the fair transaction, according to the circumstance with asset exchange between parties or the amount of liabilities. Many financial instruments – such as shares traded on an exchange, debt securities (U.S. Treasury bonds), and derivatives are measured and reported at fair value. 2. Use of Fair Value Fair value is a required measure for many financial instruments. Determining whether a financial instrument should be recorded at fair value in a company’s financial statements depends in part on what type of institution owns the instrument and the intended use of that instrument. For example, in the case of a broker-dealer, a high percentage of its assets typically are traded and must therefore be accounted for at fair value. Other institutions record financial instruments at fair value depending on what their intent is for holding the instrument or the nature of the business activity. If an institution decided to hold a U.S. Treasury bond to maturity, for example, the bond can be shown at its original cost. If the institution purchases another identical Treasury bond that it intends to sell in the near future, that bond would be accounted for at fair value. In addition to using fair value measures to comply with public reporting requirements, companies measure their financial instruments at fair value for a number of internal processes, including: making investing and trading decisions, man