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Shedding light on fair value accounts

Published: August 12 2008 03:00 | Last updated: August 12 2008 03:00

From Mr Anson J. Glacy, Jr.

Sir, Anthony Rayman (“Bad financial practice can’t exist without bad theory”, Accountancy, August 7) betrays a fundamental misunderstanding of fair value accounting when he states that an increase in the value of an asset can make its owner “worse off”. Only if corresponding liabilities advanced at a faster rate would that be true and only in relation to those liabilities.

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