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Foreign Workers

TABLE OF CONTENTS

1. INTODUCTION ………………………………………………………...1-2
2. HISTORICAL COST ……………………………………………………3-5
3. CURRENT COST ……………………………………………………….6-9
4. ISLAMIC PERPECTIVES ………………………………………………10-12
5. CONCLUSION…………………………………………………………..13
6. REFERENCES……………………………………………………………14

1. INTRODUCTION
Referring to wikipedia, “fair value, also called fair price, is a concept used in finance and economics, defined as a rational and unbiased estimate of the potential market price of a good, service, or asset, taking into account such factors as relative scarcity, risk characteristics, replacement costs, or costs of close substitutes, and production/distribution costs, including a cost of capital.” Fair Value also an armlenght of transaction where actually is difficult to apply by a company. So, a company may use market value as their fair value.
In accounting, fair value is used as an estimate of the market value of an asset (which a market price cannot be determined (usually because there is no established market for the asset). This is used for assets whose carrying value is based on mark-to-market valuations; for assets carried at historical cost, the fair value of the asset is not used. One example of where fair value is an issue is a Office kitchen with a cost of $1 million which was built 4 years ago. If the owners wanted to put a fair value on the kitchen it would be of subjective nature because there is no active market for such items.
The efficient market hypothesis asserts that, in a well organized, reasonably transparent market, the market price is generally equal to or close to the fair value, as investors react quickly to incorporate new information about relative scarcity, utility, or potential returns in their bids. The valuation of asset is concerned by an organization to meet the requirements for external financial reporting. One method in determining asset value is by calculating what those assets are worth to their owners. It depends on...