Difference between book value and market value accounting


Response to the following questions:

1. What is the difference between book value accounting and market value accounting? How do interest rate changes affect the value of bank assets and liabilities under the two methods?

2. What are the differences between the economist's definition of capital and the accountant's definition of capital?

3. How does economic value accounting recognize the adverse effects of credit risk?

4. How does book value accounting recognize the adverse effects of credit risk?

 

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Financial Accounting: Difference between book value and market value accounting
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