Fair Value Measurements of Financial Instruments by US companies and Research Paper

Fair Value Measurements of Financial Instruments by US companies and comparability issues - Research Paper Example Thus the implementation of the fair value has to be implemented at an applicable hierarchical level (Price Water Coopers, 2009, p.2) Need for study Fair value measurement of financial instruments has become a debatable topic since the emergence of the economic downturn. According to the International Accounting Standards Board (IASB) it has been made a rule to report the financial instruments based on the fair value measurement system. Through the calculation of the financial data at fair value prices the decisions related to the high risky business facing economic problem in the financial market becomes easier. The financial statements of the company computed at a fair value system gives more meaningful information to the investors, suppliers and creditors about the valuation methodologies thus used for the same. Hence it is only justified to have a clear view about the impact of the fair value measures of the financial instrument of the company. Literature review The fair value mea surement is implemented both by Goldman Sachs and Citibank with the purpose of getting the actual value during selling of assets or during the transfer of a liability on the date of measurement between the participants of the market. Even while trading of the derivatives of the company measuring in the fair value is of utmost importance to the company. Thus maintaining the rules of the levels of the hierarchy the implementation of the fair value measurement is essential as the correct information related to the accounting of the company’s books of accounts gets projected. Methodology The three methodologies for the calculation of the fair value of the company are market approach, income approach and the cost approach. In market approach the matrix pricing method is used which helps in finding the value of the debt securities in comparison to that of another firm without relying on the data of the quoted prices of specific securities. The time value of money technique is imple mented in case of the income approach methodology of fair value measurement. Lastly based on the concept of obsolesce is the implication of cost approach system of fair value. The data related to the calculation of the fair value of a company can be obtained from the annual reports of both Goldman Sachs and Citibank. For the convenience of analysis the period of 2011 has been chosen. The financial ratios are generally implemented to assess the financial health of the company, analysing which the companies fair value measurement can be done. Limitations of study The fair value measurement also has some criticism in its calculation method. Fair value measurement the inherent risk factor of the company tends to gets exaggerated resulting in misleading results in the long run. Hence the recording of the contingent losses which have not yet been realised signals negative outcome to investors, which lead to meeting of negative consequences. The fair value measurement is usually not prefer red by many analysts due to lack of reliability as the system of valuation has a tendency of showing an optimistic value irrespective of the present economic situation. Thus the business decisions taken on the basis such fair value measurement may be inaccurate in nature. Company profiles Goldman Sachs The Goldman Sachs Group, Inc. is one of the leading banks which is globally renowned for investment banking and provides a wide range of financial

Research on Tenured Teachers in the School System Paper

On Tenured Teachers in the School System - Research Paper Example Yet another essential detail to be considered is delivered through the understanding of cost as a relative good. Teachers with good reputation and solid experience are often expensive, which can be regarded by school administration as a shortcoming. Tenure protects experienced teachers from being dismissed for this reason. On the other hand, this same issue of protection becomes the primary disadvantage of tenure when doubts of the teacher’s competence raise. Due to tenure, it might become a problem to fire such a teacher without primarily addressing a lot of bureaucratic issues at hand. Moreover, another disadvantage that should be addressed here is that undergoing the legislatively fixed procedure of firing a teacher is costly and thus a lot of institutions might ignore the necessity of dismissing a teacher based on this consideration alone. In order to avoid this problem, some institutions are prone to secrecy by providing a teacher to dismiss certain sum of money (Mathis, 2010). This allows the schools to avoid disclosure and the expensive, long and difficult process of firing a tenured teacher. There is a set of other pros and cons that should be considered when talking about teacher tenure. Among the pros, there is a notion that tenure is actually quite a useful and beneficial instrument when used correctly (McGuinn, 2010, p. 26). Tenure can create the environment that allows the teachers to improve as it creates healthy competition and motivates teachers without tenure to work harder to get it.