FAIR VALUE AND ITS IMPORTANCE FOR FINANCIAL DECISION-MAKING

Due to globalization companies from different countries meet on the capital markets where investors try to place its temporary (whether short or long term) free capital. One of the main requirements affecting investors by decision-making is the evaluation of available information. When they decide to allocate their capital they require high quality information. The most coherent system providing detailed information about business events and transactions of a business entity is the accounting information system. The main output of each accounting system is a financial statements or annual report if required by accounting legislation. The accounting information obtained from such sources should be reliable, relevant, transparent and comparable. Comprehensibility belongs to the key characteristics of accounting information as well. To meet all interested user groups' needs the financial statements must be prepared under the same rules applicable to all companies listed on the capital market.