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How have US banks adopted the Financial Accounting Standards Board's Level 3 fair value disclosure rules?

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  • Walied Keshk
  • Hung‐Yuan (Richard) Lu
  • Vivek Mande

Abstract

We examine how banks have complied with the Financial Accounting Standards Board's disclosure rules on Level 3 recurring fair value measurements. We document widespread noncompliance with the basic disclosure requirements. We also find that the noncompliant banks are smaller in size and are associated with lower audit quality, lower institutional ownership and less effective internal controls. Our results should be of use to regulators, auditors and audit committees in the United States, Australia and other countries for assessing the likelihood of noncompliance with fair value disclosure rules and improving the quality of fair value disclosures provided to investors.

Suggested Citation

  • Walied Keshk & Hung‐Yuan (Richard) Lu & Vivek Mande, 2020. "How have US banks adopted the Financial Accounting Standards Board's Level 3 fair value disclosure rules?," Accounting and Finance, Accounting and Finance Association of Australia and New Zealand, vol. 60(S1), pages 693-727, April.
    • Handle: RePEc:bla:acctfi:v:60:y:2020:i:s1:p:693-727
    DOI: 10.1111/acfi.12366
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    Cited by:

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    2. Pamela Kent & Robyn McCormack & Tamara Zunker, 2021. "Employee disclosures in the grocery industry before the COVID‐19 pandemic," Accounting and Finance, Accounting and Finance Association of Australia and New Zealand, vol. 61(3), pages 4833-4858, September.
    3. Pamela Kent & Richard Kent & Robyn McCormack & Julie‐Anne Tarr, 2023. "Disclosure of liquidity and cash flow statements by Australian superannuation funds before Covid‐19," Accounting and Finance, Accounting and Finance Association of Australia and New Zealand, vol. 63(2), pages 2653-2675, June.

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