The European Union understood that the smaller population base of countries in their region did not afford them with the numerical clout to effectively raise the large sums of capital that companies in the United States with its population of 250 million plus could draw upon. It addition this huge market with a single currency, common laws and media structure provided those companies with a domestic base to generate sales and strengthen their ability to enter other global markets. The present European Union oversees 25 member nations with a combined population of 453 million. The principle barriers to this region being able to effectively trade and utilize this population base effectively consisted of the fragmented individual stock exchanges well as currencies. The cost of converting currency transactions cross border was a major inhibitor to investor participation, as well as the differing rules, accounting procedures and stock market regulations. The foregoing effectively eliminated all but the most sophisticated individuals from participating in the varied investment opportunities thus limiting the capital access potential for public companies to raise funds to finance expansion, equipment and related activities.
Under the European Union a seamless stock market system is taking place, as well as consistent accounting rules, economic policies and allied regulations. The preceding along with the creation and implementation of a single monetary unit, the Euro, is effectively removing the major impediments to the foregoing. In consort with this, Bulgaria must conform to IAS accounting policies with one specific area being the utilization of market value accounting, which is also known as ‘fair market value’. This paper will examine the climate that is fostering a change in accounting policy and procedures as well as the benefits it is expected to achieve. The questions that arise as a result of this change revolve around if this method effectively states the value of an organization and contributes to strengthening investor (individual as well as institutional), confidence.