From Mr Hugh Shields.

Sir, Jeremy Hosking (Letters, January 19) notes that “fair value accounting is flawed because it blindly assumes efficient market theory (that short-term prices reflect true value)”. In fact, the accounting definition of fair value simply defines it to be the price at which a willing buyer and a willing seller are prepared to transact today. It says nothing about whether or not the market is efficient but it does give highly relevant information to investors.