Applied principles of measurement and their regulations are interdependently correlated with the informational needs of external users. Requirements on content of accounting information given by the used accounting (and measurement) method are strongly connected not only with the group of users but also with economic environment. Actual economic environment strongly affects the requirements for measurement requested from users.
Upon economic boom there can be seen higher optimism of investors which leads towards requirement of measurement of all accounting items at fair values, which mainly represent current market prices of assets. Using this concept means the turn from the prudence principle and conservative historical costs concept in financial accounting. Moreover fair value concept in financial accounting leads to higher tendency of revaluation assets or liabilities affecting profit or loss of the company.
Upon economic recession users revaluate their views on accounting methods, especially the measurement bases. Economic recession evokes usually the renaissance of conservative approaches in measurement, especially the applicability of prudence principle.
Our paper is focused on issues of IASB reaction on financial crisis in measurement. Financial crisis precipitates discussion about measurement first of all in USA (FASB, SEC) and also in IASB in year 2008. IASB accept an amendment to the Standard IAS 39 (October 2008) permits an entity to reclassify non-derivative financial assets (other than those designated at fair value through profit or loss by the entity upon initial recognition) out of the fair value through profit or loss category in particular circumstances. The amendment also permits an entity to transfer from the available-for-sale category to the loans and receivables category a financial asset that would have met the definition of loans and receivables (if the financial asset had not been designated as available for sale), if the entity has the intention and ability to hold that financial asset for the foreseeable future. This amendment allows as we see it pointed manipulation with income and comprehensive income. Moreover IASB issues almost in the same time IFRS 9 which radically and inconsistently changes system of financial assets measurement. On the other hand IASB does not pay attention to issues of fair value measurement of nonfinancial assets (e.g. investment properties and their fair value measurement). These changes allow target manipulation with profit as well as comprehensive income.
Acknowledgment
This paper is one of the research outputs of the project GA403/11/0002 registered at Czech Science Foundation (GACR).