liabilities and assets

Running Head : Liabilities and Assets

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Fair market value which is a reasonable price that favors the demands of sellers and buyers manipulates market activities that are reflected in financial reports . In today 's business practice the fair market value is usually detected by procrastinating the expected value of assets and liabilities in the financial reports thus creating an estimated impression and financial position of business enterprises . Assets are resources that have economic value and are owned by individuals and business organizations . Liabilities

on the other hand can be perceived as legal obligations that mandate individuals and business enterprises to settle their debts (Thomsett , 2006

In accordance to the principles stipulated by US GAAP (Generally Accepted Accounting Principles ) aimed at guiding financial accounting processes I think it is a good idea to report liabilities and assets at fair market value . This practice will create a real picture of the financial status of the organization in regards to its stability which is in accordance to the principle of prudence that demands financial statements to reflect the reality of the organization (Thomsett , 2006

This practice will also prevail an opportunity for comparison and coherence of the financial information provided by organizations because individuals will be able to detect the net worth of the organization This will also help them to determine if the business enterprise is on the verge of success or failure as demanded by the principle of the permanence of methods . Furthermore , the principle of full...