Fair Value of Accounting Research Paper Example | Topics and Well Written Essays - 1250 words

Fair Value of Accounting - Research Paper Example Fair value accounting has cemented its place really well in the world of accounting on the grounds that it gives more relevant information to users. This method is a realistic approach that gives the actual worth of an entity. According to Patricia McConnell1, fair value accounting method requires the preparers of financial statements to adjust them according to the fair values. This requirement helps the investors to make a better analysis of financial statements. The primary objective of financial statement analysis is the comparative measure of risk and return. General purpose financial statements do not provide the required data for this comparative analysis without significant adjustments. A clearer picture of financial statements provides the investors with a chance to make good decisions. â€Å"†¦fair value accounting method gives fair value estimates and discloses a range of possible outcomes which may help a sophisticated investor but at the same may plague the unsophisticated investor with ambiguity and information overload.† Fair value’s biggest drawback, and the major reason of its opposition, is the lack of reliability. It is because unless an asset is exchangeable in an arm’s length transaction, its value would always be an estimate. According to a study by Avinash, Arvi & Alan Reinstein3, critics have argued that fair value accounting method aggravated the recent crisis by requiring significant write-down of assets and hence resulting in sharp decreases in regulatory capital of banks and other financial institutions. Fair values tend to fluctuate vastly in a short period at times. According to Michael Power4, there are many arguments against the fair value accounting method but they don’t automatically become arguments in favor of historical cost accounting method. The definition of fair value shows that it is the amount which might be obtained in a market. Various commentators have argued about

Strategic human resource management Essay Example | Topics and Well Written Essays - 3000 words

Strategic human resource management - Essay Example The business organisation tends to exits in a competitive environment and often faces issues like scare resources which needs to be managed effectively and thus gives the organization a competitive advantage. Thus applying the definition of strategic human resources, it can be said that it is a long term focus, provides a linkage in between the human resources and strategy process, enhances effective performance and finally foster excellence corporate skills (Deb, 2006, p. 45-48). The main purpose of HR strategies is to articulate the intention of organisation related policies and practises and as per the dictum of Fomburn (1984) the business and the manager needs to perform well in the current environment in order to succeed in the future business environment. Strategic human resource management has various sectors such as recruitment and selection, training and development, performance management and others. However this paper will talk widely about performance management and perfo rmance related pay (PRP). ... Reward is a key practise in the framework of performance management strategy. Reward systems are of two types, one is monetary component of reward management which tends to fulfil the needs of employees such as hygiene factors, security and physiological needs and second factor is recognition and job satisfaction (Kandula, 2006, p. 59). The logic behind implementing the performance pay by organisation is as follows, PRP focuses on the effort where the organisation actually requires it PRP supports the culture of performance oriented The PRP scheme emphasis the performance of individual PRP aims to strengthen the process of performance planning PRP rewards the right employee and hence motivates to work more (Salaman, Storey & Billsberry, 2005, p.178). Therefore PRP is an essential and important tool use by organisation to enhance the performance of both the employees and the organisation as a whole. The next section deals entirely with performance related pay and aim to answer to the proposition whether the disadvantage of performance related pay outshines the advantage of PRP schemes. Performance-related pay systems The various forms of paid employment which also includes remuneration on base pay tend to have performance expectation or standard attached to it. According to Behrend, every form of employment which is paid involves effort bargain and also pay bargain. Performance standards are highly implicit and thus are open to contestation and misunderstanding of psychological contract. Strategic decisions which take place at the board level encompass performance related pay mainly for senior managers and directors. The PRP is often regarded as motivational tool for the top level management to achieve the target which