Question

what are the contribution to relevant representing accounting information of fair value accounting.

Answer 1

Fair value accounting is a method where we value assets and liabilities as per their fair value that is market price. It means we value we will get if we sell the asset at current time period. For this purpose, we always look for the type of market, like an active market would always provide us with most appropriate fair value. The reason this accounting is preferable because it gives a true and fair value of assets and liabilities so that assets cannot be over-valued and liabilities cannot be undervalued.