Controversies Generated by the Opposability Historical Costs – Fair Values in Accounting Valuation

Author:Associate professor PhD. Aureliana Geta ROMAN, PhD Student Mihaela MOCANU

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Keywords:fair value, historical costs, controversies, subjectivity

Abstract:
Accounting valuation is still a controversial topic. One can bring arguments both in favour of the fair value accounting and in favour of the traditional model of valuation at historical costs. On the other hand, both the fair value valuation model and the model of valuation at historical costs have faults. The present article analyzes the controversies generated by the opposability between historical costs and fair value in accounting valuation. One discusses subjectivity in valuation, the quality of the accounting information generated by the two valuation models and the component of the financial statements (the balance sheet or the profit and loss account) that is primary within the two approaches. The current paper presents some of the difficulties faced by a professional accountant in accounting valuation.

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