Does fair value accounting contribute to market price volatility? An experimental approach

2013 ◽  
Vol 54 (4) ◽  
pp. 1033-1061 ◽  
Author(s):  
Carl Brousseau ◽  
Michel Gendron ◽  
Philippe Bélanger ◽  
Jonathan Coupland
Keyword(s):  
Experimental Approach ◽  
Market Price ◽  
Price Volatility ◽  
Fair Value ◽  
Fair Value Accounting

scholarly journals Fair Value Accounting And Financial Stability – Based On The Adoption

2016 ◽  
Vol 32 (6) ◽  
pp. 1825
Author(s):  
Chae Chang Im ◽  
Ahrum Choi ◽  
Sungtaek Yim
Keyword(s):  
Financial Stability ◽  
Market Price ◽  
Relevant Information ◽  
Fair Value ◽  
The Other ◽  
Financial Statement ◽  
Fair Value Accounting ◽  
Financial Firms ◽  
Ifrs Adoption ◽  
Current Market Price

Fair value accounting refers to the accounting method which an asset or liability is estimated based on the current market price, so called fair value. Under the fair value accounting, it is more difficult for managers to hide bad information, because the value of an asset or liabilities is re-estimated periodically to reflect the changes in fair value in the market. In this case, firms’ financial stability will be increased. On the other hand, fair value accounting can intensity the volatility of the numbers in the financial statement, which leads to decreases the financial stability. This papers empirically examines the effect of the fair value accounting on the financial stability based on the IFRS adoption in Korea. Using the non-financial firms listed in KOSPI and KOSDAQ from 2000 to 2013, we find that the expansion of fair value accounting increases financial stability. The results support the argument that fair value accounting prohibits managers from hiding bad information, rather it enforces the disclosure of value-relevant information to the investors. The results are consistent with a battery of robustness checks. Thus, the overall results show that the expansion of fair value accounting increase financial stability. 

Bankers’ Compensation and Fair Value Accounting

2011 ◽  
Author(s):  
Gilad Livne ◽  
Garen Markarian ◽  
Alistair K. L. Milne
Keyword(s):  
Fair Value ◽  
Fair Value Accounting
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