Fair value accounting and the SNA

This paper discusses some issues relating to fair value accounting as it is or might be applied in the national accounts. Although the SNA accounting rules are fair value in the sense that they are based on economic principles, the principles underlying recent trends in fair value business accounting have progressed beyond those adopted by SNA93. For stock evaluation, focusing on the valuation of loan assets, I find that the book value evaluation espoused in both SNA93 and the IMF Manual may potentially deviate substantially from the fair value of loan assets. For flow evaluation, illustrated using an example which compares alternative methods of recording the interest accrual on zero-coupon bonds, I point out that the creditor approach based on fair value accounting seems to be better than the debtor approach conventionally used in the SNA, and that its adoption could change the concept of income used in the SNA.