Who Uses Fair-Value Accounting for Non-Financial Assets Following IFRS Adoption?*

2008 ◽  
Author(s):  
Hans Bonde Christensen ◽  
Valeri V. Nikolaev
Keyword(s):  
Fair Value ◽  
Financial Assets ◽  
Fair Value Accounting ◽  
Ifrs Adoption

scholarly journals An Evaluation Of The Implementation Of Fair Value Accounting: Impact On Financial Reporting

2011 ◽  
Vol 9 (1) ◽  
Author(s):  
Karen T. Cascini ◽  
Alan DelFavero
Keyword(s):  
Financial Reporting ◽  
Accounting Standards ◽  
Fair Value ◽  
The United States ◽  
Financial Accounting ◽  
Financial Assets ◽  
Financial Accounting Standards Board ◽  
Continuous Change ◽  
Fair Value Accounting ◽  
The Cost

<p class="MsoNormal" style="text-justify: inter-ideograph; text-align: justify; margin: 0in 0.5in 0pt; mso-pagination: none;"><span style="color: #0d0d0d; font-size: 10pt; mso-themecolor: text1; mso-themetint: 242;"><span style="font-family: Times New Roman;">The accounting industry is in a state of continuous change.<span style="mso-spacerun: yes;">&nbsp; </span>In the United States, the historical cost principle has traditionally been the foundation of accounting.<span style="mso-spacerun: yes;">&nbsp; </span>Until recently, assets and liabilities have been required to be recorded at their acquisition prices, with the exception of designated financial assets and financial liabilities.<span style="mso-spacerun: yes;">&nbsp; </span>However, the Financial Accounting Standards Board (FASB) has now created accounting standards that are distant from the cost principle.<span style="mso-spacerun: yes;">&nbsp; </span>Statement of Financial Accounting Standards No. 157: Fair Value Measurements, issued in September 2006 (FAS157, now codified as ASC 820) and Statement of Financial Accounting Standards No. 159: The Fair Value Option for Financial Assets and Financial Liabilities, created in February 2007 (FAS159, now ASC 825-10-25), significantly increases the viability of fair value accounting. The purpose of this paper is to illustrate the benefits and pitfalls of fair value and the corresponding affects on various stakeholders. <span style="mso-spacerun: yes;">&nbsp;&nbsp;</span></span></span></p>

Does fair value accounting for non-financial assets pass the market test?

2013 ◽  
Vol 18 (3) ◽  
pp. 734-775 ◽  
Author(s):  
Hans B. Christensen ◽  
Valeri V. Nikolaev
Keyword(s):  
Fair Value ◽  
Financial Assets ◽  
Fair Value Accounting ◽  
Market Test

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. 

scholarly journals Exploring the Relevance and Reliability of Fair Value Accounting

2020 ◽  
Vol 0 (0) ◽  
Author(s):  
Yoshitaka Fukui ◽  
Shizuki Saito
Keyword(s):  
Measurement Method ◽  
Fair Value ◽  
Faithful Representation ◽  
Financial Assets ◽  
Financial Instruments ◽  
Fair Value Accounting ◽  
Fair Value Measurement ◽  
Value Measurement ◽  
Qualitative Characteristics ◽  
Relevance And Reliability

AbstractWhile the FASB had regarded relevance and reliability as two of the most important qualitative characteristics for years, it replaced reliability with faithful representation revising its Concepts Statement No. 2 in 2010. Even if fair values are relevant for the measurement of assets and liabilities, these figures are not necessarily reliable or verifiable. We believe this point is the central message of Ramanna, K. (2019). Unreliable accounts: How regulators fabricate conceptual narratives to diffuse criticism. Accounting, Economics and Law: A convivium forthcoming. The application of fair value measurement has been substantially extended recently to income recognition of not-for-trading financial instruments and even non-financial assets. Is this extension due to the primacy of relevance over reliability, or the relaxing of requirement for reliability toward faithful representation? Whatever measurement method we use, it is absolutely necessary to construct a system of concepts on which the purpose of measurement should be established. In spite of the fact that any measurement method is a means to intended purposes, if we first chose a particular method and applied it to every situation slavishly, we would become similar to a bogus doctor selling a fake drug as panacea valid for any disease.

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