Accounting principles are incorporated into legal and professional regulation, but they also have the function of supplementing accounting standards whenever some issues are not explicitly regulated by standards or / and there is a high degree of judgment. Incorporating fair value accounting into the normative basis of financial reporting violates the principle of conservatism and the historical cost principle, the realization principle is suspended and the matching principle is fundamentally changed. Namely, due to the change in the main purpose of financial reporting, the principles of traditional accounting, whose respect enabled to determine as accurately as possible and comparable periodic results, become ineligible to meet the objectives of modern financial reporting. The fact that high-quality financial reporting is the information base for investors and other stakeholders and the accounting ideal has stimulated accounting practices to further development accounting principles, and accounting theory to examine existing and develop modern valuation principles that are in function to achieve the goals of financial reporting. In regard to this, the paper focuses on the principles of fair value accounting that stand out in the professional literature and whose content is incorporated into the financial reporting standards. In addition to analyzing the substance and content of the principles of fair value accounting, the paper examines the possibilities and limitations as well as the preconditions for their successful application in modern financial reporting.

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