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The paper conducts a comparative analysis on the basic pros and cons associated with the concept and application of Fair Value Accounting (FVA) and that of Historical Cost Accounting (HCA) as reported in the contemporary Accounting literature with a view to providing a nexus to the debate on the suitability of each concepts in shaping and directing the preparation and presentation of financial information. The review therefore concludes that HCA is considered as easy to use, conservative, reliable and simple to understand by management and users of financial reports. However, the proponents of FVA consider historical cost accounting as obsolete, because it focuses on historic cost allocations rather than on realistic reporting of values even during times of significant changes. While the basic flaws of FVA is subjectivity and complexity.
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