Zeitschrift für Wirtschaft und Finanzen

A Fair Value and Hedge Activities

Abstract

Doan Van Dinh and Guangming Gong

This article, author consider the fair value of financial instruments whether it is appropriate for economic development and the volatility of the stock market or not through investors’ financial statement analysis and to help the Managers, Investors and someone else understand about reasonable economic information in financial statements. Because, Use of fair Value method plays an important role in measurement of financial instruments and help entity can decrease risk financing. However, Vietnam entities have not applied fair value method yet to revalue financial assets. So value financial assets in financial statements are not exact. This problem impacts on Vietnam financial market for long time. This article shall consider the fair value and historical cost methods measure financial instruments on the stock market through economic transactions to find out the difference of value financial assets, when using two these method to revalue them. The usage of fair value measurement accounting is a necessary factor for the development of Vietnamese stock market. Currently, Vietnamese accounting is using a book method for financial instruments; besides that the fair value accounting has not been thoroughly applied by entities under the standards of international financial instruments accounting.