Pawan Jain
The purpose of this paper is to analyse concept of fair value accounting along with its merits & demerits as observed and concluded by researchers world over. With Indian standard setting body coming out with reporting standard on fair value accounting, the concept is being adopted by Indian corporate world. The paper also tries to present usage of concept of fair valueaccounting in Indian scenario. The paper is a qualitative study on the objectives mentioned and does not use any data to support the conclusion. The paper, however uses literature review extensively. Due to chosen research approach, the paper may lack generalizability hence further study can be carried out to test the work. The research has concluded that fair value accounting has merits and demerits when used for corporate financial reporting. Standard setters should laydown more comprehensive guidelines dealing with drawbacks like absence of active market, manipulation by firm’s management, element of time affecting relevance & reliability of values captured under fair value. Academicians need to work on various training programs on adoption process of fair value accounting method in corporate financial reporting