A Study of the Effect of Fair Value Measurement on the Financial Performances of Selected NSE-Listed Companies
DOI:
https://doi.org/10.31674/ijrtbt.2024.v08i03.002Abstract
In recent years, fair value measurement has become an important concept in accounting terminology. A significant development has been observed when the measurement of assets and liabilities has been made through fair value while preparing the financial statement of an entity. The importance of which is entirely related to transparency, reliability, and comparability of the statements of affairs of business entities. The question of transparency in accounting arose as the number of stakeholders in business entities increased. In India, fair value measurement is based on Ind AS 113, and it has had an enormous impact on the financial performances of companies listed on the NSE. This paper dwells upon the fact regarding the impact of fair value measurement on financial performances of the top 12 NSE-listed companies of two sectors, namely, automobile and metal, by means of the Fair Value Index (FVI) and by content analysis technique to show the trend through the ratio of these two sectors and whether these companies’ financial position has been improving by implementing FVM in their reporting. The data has been collected from secondary sources, and the research is basically an exploratory in nature. The results show that none of the companies under these two sectors perform very poorly after disclosures under FVM; rather, these companies are trying to improve their financial recording by implementing proper disclosures and nomenclatures.
Keywords:
Fair Value Measurement, Financial Reporting, Fair Value Index, Ind AS 113, NSEDownloads
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