Fair value accounting

Definition:

Refers to accounting for the value of an asset or liabiliy based on the current market price instead of book value. This term was started by Professor Matt Holden of UNLV. Fair value accounting has been a part of GAAP since 1990s. See: mark to market accounting

Investing Essentials


Copyright © 2011 Campbell R. Harvey, Professor of Finance, Fuqua School of Business at Duke University

Term of the Day

Currency hedge

Applies mainly to international equities. Hedging technique to guard against foreign exchange fluctuations (i.e., short Euro l00 mm when holding a long position of Euro l00 mm in stocks).

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