Consequences of Voluntary and Mandatory Fair Value Accounting PDF Download
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Author: Karl A. Muller
Publisher:
ISBN:
Category :
Languages : en
Pages : 43
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Book Description
We examine the causes and consequences of European real estate firms' decisions to provide investment property fair values prior to the required disclosure of this information under International Financial Reporting Standards (IFRS). We find evidence that investor demand for fair value information--reflected in more dispersed ownership--and a firm's commitment to transparency increase the likelihood of providing fair values prior to their required provision under International Accounting Standard 40 - Investment Property. We also find that firms not providing these fair values face higher information asymmetry. However, we fail to find that the relatively higher information asymmetry was reduced following mandatory adoption of IFRS. Rather, we find that differences in information asymmetry largely remain. Taken together, this evidence suggests that common adoption of fair value accounting due to the mandatory adoption of IFRS does not necessarily level the informational playing field.
Author: Karl A. Muller
Publisher:
ISBN:
Category :
Languages : en
Pages : 43
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Book Description
We examine the causes and consequences of European real estate firms' decisions to provide investment property fair values prior to the required disclosure of this information under International Financial Reporting Standards (IFRS). We find evidence that investor demand for fair value information--reflected in more dispersed ownership--and a firm's commitment to transparency increase the likelihood of providing fair values prior to their required provision under International Accounting Standard 40 - Investment Property. We also find that firms not providing these fair values face higher information asymmetry. However, we fail to find that the relatively higher information asymmetry was reduced following mandatory adoption of IFRS. Rather, we find that differences in information asymmetry largely remain. Taken together, this evidence suggests that common adoption of fair value accounting due to the mandatory adoption of IFRS does not necessarily level the informational playing field.
Author: Karl A. Muller
Publisher:
ISBN:
Category :
Languages : en
Pages : 44
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Book Description
We examine the effects of mandating the provision of fair value information for long-lived tangible assets on firms' information asymmetry. Specifically, we investigate whether European real estate firms' compulsory adoption of International Accounting Standard 40 - Investment Property (IAS 40), which mandated the provision of investment property fair values in 2005, resulted in reduced information asymmetry across market participants. Using as a control group firms that voluntarily provided these fair values prior to the mandatory adoption of IAS 40, we find that mandatory adoption firms exhibit a larger decline in information asymmetry, as reflected in lower bid-ask spreads. However, we also find that mandatory adoption firms continue to have higher information asymmetry than voluntary adoption firms, which appears partially attributable to the lower reliability of fair values reported by the mandatory adoption firms. Together, this evidence adds to the debate on fair value accounting by demonstrating that common adoption of fair value, even for long-lived tangible assets, under a mandatory reporting regime can reduce, but not necessarily eliminate, information asymmetry differences across firms.
Author: International Accounting Standards Board
Publisher:
ISBN:
Category : Business & Economics
Languages : en
Pages : 104
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Book Description
Author: Igor Goncharov
Publisher:
ISBN:
Category :
Languages : en
Pages :
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Author: E. Menicucci
Publisher: Springer
ISBN: 1137448261
Category : Business & Economics
Languages : en
Pages : 200
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Book Description
The 2008 financial crisis has turned a spotlight on the role of financial reporting in periods of economic downturn. In analysing the financial crisis, many commentators have attributed blame to fair value accounting (FVA) because of the pro-cyclical effect it potentially introduces in banks' financial statements. This book discusses how FVA affects financial reporting during a financial crisis. It provides an in-depth analysis of the key benefits and negatives of FVA, and discusses the controversial practice of trade-offs with historical cost accounting (HCA). It provides an overview of the principles and applications of FVA, and explains its impact on banks' financial statements. Investigating the effect of FVA on the volatility of earnings and regulatory capital in European banks, the book asks whether incremental volatility is indeed reflected in bank share prices. It examines empirical evidence to quantify the role that FVA may have played in times of stress in the banking sector, both in Europe and elsewhere. Fair Value Accounting explores the criticism FVA has received despite its perceived merits, and summarizes the various opposing views of parties in this major policy debate, which has involved banking and accounting regulators from across the globe.
Author: Ibrahim Mert
Publisher: Springer Nature
ISBN: 3030984869
Category : Business & Economics
Languages : en
Pages : 183
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Book Description
The book describes the historical evolution and development of accounting theories and principles. Value and valuation have been reviewed extensively. The author provides a detailed comparison between historic and fair value accounting. A comprehensive review of the literature and researchers’ opinions about measurement, fair value, and historical cost value will enable the readers to understand the concepts in detail. Additionally, the book includes case studies evaluating the accounting practices in Turkey and Romania to illustrate how these concepts are implemented in practice. The reader will obtain a good understanding of the local nationalized accounting systems, and up to what extent countries have adapted to IFRS. The books discusses the usage of IT tools in accounting and analyses the impact of information technology such as big data, artificial intelligence, and data analytics in the field of accounting.
Author: Karthik Ramanna
Publisher:
ISBN:
Category :
Languages : en
Pages : 160
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Book Description
I study the evolution of Statement of Financial Accounting Standard (SFAS) # 142, which uses unverifiable fair-value estimates to account for acquired goodwill. I find evidence consistent with the Financial Accounting Standards Board (FASB) issuing SFAS 142 in response to political pressure over its proposal to abolish pooling accounting: pro-pooling firms can be linked-via political contributions-to U.S. Congresspersons pressuring the FASB on this issue. This result is interesting given the proposal to abolish pooling was due in part to the Securities and Exchange Commission's concerns over pooling misuse. I also find evidence consistent with lobbying support for SFAS 142 increasing in firms' discretion under the standard. Agency theory predicts this unverifiable discretion will be used opportunistically. The results highlight the potential costs of unverifiable fair-value accounting.
Author: Ulf Brüggemann
Publisher: Springer Science & Business Media
ISBN: 3834969524
Category : Business & Economics
Languages : en
Pages : 162
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Book Description
Ulf Brüggemann discusses and empirically investigates the economic consequences of mandatory switch to IFRS. He provides evidence that cross-border investments by individual investors increased following the introduction of IFRS.
Author: Kristian Bachert
Publisher: Peter Lang Gmbh, Internationaler Verlag Der Wissenschaften
ISBN: 9783631633113
Category : Fair value
Languages : de
Pages : 0
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Book Description
Fair value accounting is viewed as a major feature of IFRS and several standards either require assets to be measured at fair value or at least provide an option to fair value measurement instead of applying historical cost. While it is argued that fair values provide more timely and relevant information, the global financial crisis led to a considerable debate about the usefulness of fair value accounting. The study examines the implications of fair value accounting for financial analysts and nonprofessional investors. It provides evidence that, even if financial analysts find it challenging to produce accurate forecasts under a fair value regime, nonprofessional investors make larger investments and are more confident with their judgments for fair value firms.
Author: Haiping Wang
Publisher:
ISBN:
Category :
Languages : en
Pages :
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Book Description
