Accounting Standards Have Developed Over Time to Reflect Changes in the Business

question 32

Essay

Accounting standards have developed over time to reflect changes in the business world as well as changes in our ability to account for such changes. Using the example of marking assets and liabilities to their fair value, explain why you would expect accounting standards to change.

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Definitions:

Par Value

A nominal value or face value assigned to a share of stock by the corporation at the time of issue.

Articles Of Incorporation

These are legal documents filed with a governmental body to legally document the creation of a corporation.

Liquidated

Refers to the process of converting assets into cash or completing a transaction, such as settling debts.

Dollar Amount

The value of a transaction, asset, liability, or equity in terms of currency units.