For example, a company uses futures contracts to hedge the price risk of its inventory. According to conventional accounting methods, futures contracts should be measured at fair value, and their changes should be included in the current profits and losses. Inventory is measured according to the lower of cost and net realizable value, which will also cause the profit and loss reflected in the profit statement of the enterprise to fluctuate greatly. When futures and inventory prices rise at the same time, futures contract losses are included in the current profit and loss, while inventory floating gains cannot be included in the current profit and loss.
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Nowadays, the application of fair value measurement is more and more common, and fair value is clearly defined in China's accounting standards. Fair value applies not only to financial assets, but also to financial liabilities. However, the application of fair value measurement in financial liabilities is obviously less than that in financial assets. In the subsequent measurement of financial liabilities, amortized cost measurement is used more than fair value measurement. In practice, the inconsistency of measurement attributes will inevitably affect the financial statements of companies and enterprises, resulting in the mismatch of accounting information. This unbalanced application of fair value in financial assets and financial liabilities leads to accounting mismatch.
Accounting mismatch conceals the true value of the company and distorts accounting information, which will not only affect the operation and management of the company, but also affect the supervision and management of the company by the regulatory agencies, which will have an adverse impact on the company. Therefore, it is very necessary to study accounting mismatch.
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