Fair value accounting research paper

Standard setters typically presume that investors and analysts view accounting as a practice of valuation and, therefore, favor the greater use of fair value measurement. That is, even though the principles of valuation and performance differ, this difference does not lead to open disagreement and political lobbying from investors and analysts.

Publication date: 4 July Abstract Purpose The aim of this paper is to review the main results of accounting research literature examining the role of fair value accounting FVA within financial crisis.

This research analyzes theoretical and empirical studies on the controversial topic about FVA and its alleged pro-cyclicality in the context of the financial crisis to offer solid reflections for improving the fair value research agenda.

fair value method

Findings The review reveals that there has been only a limited amount of research into the role of FVA within the financial crisis. Consequences of this dissonance to our understandings of the absence of worth of fair values in capital markets are discussed.

The paper sets out the main findings of the academic literature and identifies future avenues of theoretical and practical research which may support standard setters to draw up improved accounting regulation. However, using interview evidence, it is shown here that investors and analysts expect accounting to provide them with insights into the performance of a business, and are quite cautious about the limits of using fair values in financial reports.

Abstract en Investors and analysts are designated as the primary users of financial reports by standard setters, yet we know very little about their use of accounting information and about their relationship with standard setters.

Impact of fair value accounting on financial statement

The specificity of the theme narrows the coverage. Overall, the paper contributes to a better understanding of the relationship between accounting and its users. However, using interview evidence, it is shown here that investors and analysts expect accounting to provide them with insights into the performance of a business, and are quite cautious about the limits of using fair values in financial reports. Publication date: 4 July Abstract Purpose The aim of this paper is to review the main results of accounting research literature examining the role of fair value accounting FVA within financial crisis. Standard setters typically presume that investors and analysts view accounting as a practice of valuation and, therefore, favor the greater use of fair value measurement. Findings The review reveals that there has been only a limited amount of research into the role of FVA within the financial crisis. This paper explores how investors and analysts evaluate the usefulness of fair values to their work. Practical implications This paper can be of use to both researchers and practitioners interested in investigating strengths and weaknesses of the fair value concept for accounting purposes. The main contribution of this paper relates to further understanding the role and effects of accounting matters concerning fair value in a broad sense within the context of the financial crisis. However, the adopted research methodology enabled the main contributions concerning this issue to be collected, to realize a concise and comprehensive portrait of the debate surrounding FVA and the financial crisis. The paper sets out the main findings of the academic literature and identifies future avenues of theoretical and practical research which may support standard setters to draw up improved accounting regulation. This review offers a comprehensive overview on research literature concerning the responsibility of FVA in causing the financial crisis. Log out of ReadCube. Abstract en Investors and analysts are designated as the primary users of financial reports by standard setters, yet we know very little about their use of accounting information and about their relationship with standard setters. Theoretical and empirical research studies were investigated and then systematized in a framework to guide a literature-based analysis and critique of the relevant literature published about this topic.

Practical implications This paper can be of use to both researchers and practitioners interested in investigating strengths and weaknesses of the fair value concept for accounting purposes. Overall, the paper contributes to a better understanding of the relationship between accounting and its users.

Fair value accounting research paper

Consequences of this dissonance to our understandings of the absence of worth of fair values in capital markets are discussed. This topic has not been researched extensively, and there is no empirical evidence that FVA caused the financial crunch and the subsequent financial crisis. Practical implications This paper can be of use to both researchers and practitioners interested in investigating strengths and weaknesses of the fair value concept for accounting purposes. This research analyzes theoretical and empirical studies on the controversial topic about FVA and its alleged pro-cyclicality in the context of the financial crisis to offer solid reflections for improving the fair value research agenda. The paper sets out the main findings of the academic literature and identifies future avenues of theoretical and practical research which may support standard setters to draw up improved accounting regulation. Abstract en Investors and analysts are designated as the primary users of financial reports by standard setters, yet we know very little about their use of accounting information and about their relationship with standard setters. Standard setters typically presume that investors and analysts view accounting as a practice of valuation and, therefore, favor the greater use of fair value measurement. This paper explores how investors and analysts evaluate the usefulness of fair values to their work. Theoretical and empirical research studies were investigated and then systematized in a framework to guide a literature-based analysis and critique of the relevant literature published about this topic.

The main contribution of this paper relates to further understanding the role and effects of accounting matters concerning fair value in a broad sense within the context of the financial crisis.

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Fair value accounting and the financial crisis: a literature