Fair Valuation of Financial Liabilities

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Through my research during the three years from 2000 to 2002, I have been able to provisionally conclude the foll owing ; I have comprehensively researched both fixed and contingent financial liabilities, mainly from the point-of-view of borrowing, provision for post-retirement benefits, other provisions, and contingencies. The results showed that we can distinguish between two events with the same amount and timing, but that are different in probability, by including the probability of an event into the calculation of the expected value. However, more consideration must be given as to whether or not it should be on balance. If a contingent event is on balance as a contingent liability that has never been on balance, we have to check not only the usefulness of the information, but also the quality of the income into which on-balance of the contingent one made change. Unfortunately, because we have not solved the latter problem, we have as yet not been able to formulate a comprehensive and consistent theory for fair valuation of all financial liabilities under the constraints of the currently accepted accounting theory