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Fair Value Accounting: A Controversial but Promising System

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  • Fawzi A. Al Sawalqa

Abstract

There is almost a worldwide consensus that the usage of fair value accounting is not an easy task due to some limitations that affect its reliability. Prior studies in fair value accounting have unanimously agreed on the existence of clear defects in measuring fair value especially under level 3 of fair value hierarchy where active market does not easily exist for the asset or liability. The current study offers some creative suggestions that standard-setters (e.g. FASB and IASB), regulators, practitioners and academics should globally adopt to ensure a brighter future for fair value accounting.

Suggested Citation

  • Fawzi A. Al Sawalqa, 2016. "Fair Value Accounting: A Controversial but Promising System," Accounting and Finance Research, Sciedu Press, vol. 5(1), pages 1-88, February.
    • Handle: RePEc:jfr:afr111:v:5:y:2016:i:1:p:88
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    References listed on IDEAS

    as
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    5. Michel Magnan & Daniel Thornton, 2009. "Fair Value Accounting," CIRANO Working Papers 2009s-47, CIRANO.
    6. Michael Power, 2010. "Fair value accounting, financial economics and the transformation of reliability," Accounting and Business Research, Taylor & Francis Journals, vol. 40(3), pages 197-210.
    7. Wayne Landsman, 2007. "Is fair value accounting information relevant and reliable? Evidence from capital market research," Accounting and Business Research, Taylor & Francis Journals, vol. 37(S1), pages 19-30.
    8. Mary Barth & Wayne Landsman, 2010. "How did Financial Reporting Contribute to the Financial Crisis?," European Accounting Review, Taylor & Francis Journals, vol. 19(3), pages 399-423.
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    JEL classification:

    • R00 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General - - - General
    • Z0 - Other Special Topics - - General

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