Fair Value Model Research Paper by Nicky

Fair Value Model
The paper examines the fair value and cost models in relation to real estate valuation in Hong Kong and attempts to assess the reliability of the fair value model.
# 145450 | 5,910 words | 14 sources | APA | 2010 | US
Published on Nov 10, 2010 in Business (Accounting) , Business (Companies) , Economics (General)

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With many economies worldwide in a financial tailspin this paper seeks to determine whether the fair value model or the cost model is more efficient especially in regards to the valuation of real estate assets in Hong Kong. The paper specifically seeks to determine whether the fair value model is a good representation of the true value of investments so that investors can make decisions that are both timely and effective in their nature. By comparing the fair value model to the cost model the paper attempts to present a clear picture since both, distinctively different, models are used extensively in the Hong Kong market . The paper specifically addresses the reliability of the fair value model as it is used in the valuation of assets for financial statements.

Table of Contents:
Literature Review
Findings and Analysis

From the Paper:

"Hong Kong is an international market that sports an excellent legal system, offers companies low tax rates, and due to the limited available land for development usually offers a good real estate investment value. Since 2004 the Hong Kong real estate market has doubled in value. Much of that gain is perceived in value especially when the entity perceiving the value uses the fair value model to assign a value to the property.
"In Hong Kong, the government controls the land. The island of Hong Kong is approximately 425 square miles and those miles are home to approximately seven million citizens. Land is valuable and limited. One of the best investments a citizen of Hong Kong has been able to make throughout the years is to purchase land, oftentimes seeing a double, triple or even quadruple in value over a short number of years."

Sample of Sources Used:

  • Bacinello, A.R.; (2003) Fair valuation of a guaranteed life insurance participating contract embedding a surrender option, The Journal of Risk and Insurance, Vol. 70, No. 3, pp. 461 - 487
  • Cho, H.; Shilling, J.D.; (2007) Valuing retail shopping center lease contracts, Real Estate Economics, Vol. 35, No. 4, pp. 623 - 649
  • Gang-Zhi, F.; Tien, F.S.; Seow, E.O.; Simans, C.F.; (2004) Governance and optimal financing for asset-backed securitization, Journal of Property Investment and Finance, Vol. 22, Issue 4/5, pg. 414
  • Gilbert, R.J.; Klemperer, P.; (2000) An equilibrium theory of rationing, The Rand Journal of Economics, Vol. 31, No. 1, pp. 1 - 21
  • HKAS 39; (May, 2004) Hong Kong accounting standard 39, Financial Instruments: Recognition and Measurement, accessed January 5, 2009 at: http://www.hkicpa.org.hk/hksaebk/HKSA_Members_Handbook_Master/volumeII/hkas39.pdf, copyright 2008 Hong Kong Institute of Certified Public Accountants

Cite this Research Paper:

APA Format

Fair Value Model (2010, November 10) Retrieved June 03, 2023, from https://www.academon.com/research-paper/fair-value-model-145450/

MLA Format

"Fair Value Model" 10 November 2010. Web. 03 June. 2023. <https://www.academon.com/research-paper/fair-value-model-145450/>