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Fair value accounting from a distributed cognition perspective
Institution:1. Discipline of Surgery, Sydney Medical School, University of Sydney, Sydney, Australia;2. Breast and Surgical Oncology at The Poche Centre, North Sydney, Australia;3. The Mater Hospital, North Sydney, Australia;4. Royal North Shore Hospital, St Leonards, Australia;5. Sydney Adventist Hospital, Wahroonga, Australia;6. Nuclear Medicine and Diagnostic Ultrasound, RPAH Medical Centre, Sydney, Australia;7. Discipline of Medicine, University of Sydney, Australia;8. North Shore Nuclear Medicine, Mater Hospital, North Sydney, Australia;9. Dee Why Nuclear Medicine, Dee Why, Sydney, Australia;10. Strathfield Private Hospital, Australia;11. Centre for Health Economics Research and Evaluation, University of Technology, Sydney, Australia;12. NHMRC Clinical Trials Centre, University of Sydney, Sydney, Australia;1. School of Economics, University of Kent, Canterbury, Kent CT2 7NP, United Kingdom;2. Bank of Japan, Monetary Affairs Department, 2-1-1 Nihonbashi-Hongokucho, Chuo-ku, Tokyo 103-0021, Japan
Abstract:This study offers a unique interdisciplinary perspective on fair value accounting. The growing influence of esoteric financial instruments whose valuation is becoming increasingly complex makes it necessary to focus on actual valuation practices. Based on an extensive review, this paper regards fair value accounting for complex financial instruments as involving processes distributed among actors located inside and/or outside a reporting entity. It also draws attention to collaboration by organizations that apply their external and internal resources to perform complex financial valuations. Furthermore, it demonstrates that cases involving unusual market conditions underline the importance of human interactions to the valuation process.
Keywords:Fair value accounting  Distributed cognition  Accounting for financial instruments  Investment companies  Financial crisis
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