BY MARCO TROMBETTA Fair value or not fair value: The loan is the
question Let’s Look at two everyday situations. in one, a bank
lends money to someone to buy a house or to start a new
business. in the second, a company raises debt financing to
finance a new investment. at first glance, these two situations
seem pretty common and standard. Consequently, the general
public could think that the accounting for these situations
should be pretty un- controversial and straightfor ward.
However, anyone who is familiar with recent accounting debates
is aware that this is far from being the case. These are two of
the most controversial items when the issue of account- ing for
financial instruments is examined. Moreover, they are at the
heart of the conflicting areas of the convergence process put in
place by the Financial accounting standards Board and the
international accounting standards Board, which is due to be
completed by 2011. two official documents have recently been
released on the subject. in november 2009,