Definicja fair value adjustments

Co znaczy FAIR VALUE ADJUSTMENTS:

The difference between the value of an investor unit's balance sheet item at the date of consolidation, and the value in the investee unit's balance sheet, which is

Lower when asset items are involved; or Higher when liability or equity items are involved.

If the investor value is higher (debit difference), this is referred to as an excess of cost over book value (when the equity method is used), an excess of fair value over book value, an undervaluation of (investee) net assets, or hidden reserves.

If the investee value is higher (credit difference), this is referred to as an excess of book value over cost (when the equity method is used), an excess of book value over fair value, an overvaluation of (investee) net assets, or hidden contingencies.

These fair value adjustments can be recorded and amortized during consolidation of investments.