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Fair Value of Real Estate and Utility of Financial Statements of Construction Companies

Author

Listed:
  • Andrˆms Navarro-Galera

    () (University of Granada)

  • Marˆqa del Carmen Pˆmrez-Lˆupez

    () (University of Granada)

  • Lˆhzaro Rodrˆqguez-Ariza

    () (University of Granada)

Abstract

Some international standards have proposed that the fair value approach should be used to evaluate real estate assets. The choice to use this method or another approach could influence the quality of the financial reports published in response to information demands by company stakeholders. In this study, we will examine whether fair value evaluation, in the real estate context, improves the utility of construction company financial reports. For this purpose, we have addressed a questionnaire to financial directors that concern the relevance, reliability and viability of this valuation criterion. Based on the opinion of the respondents, our results show that the fair value model would improve the usefulness of financial reports to evaluate company solvency, and would also improve the comparability, timeliness and understandability of such reports.

Suggested Citation

  • Andrˆms Navarro-Galera & Marˆqa del Carmen Pˆmrez-Lˆupez & Lˆhzaro Rodrˆqguez-Ariza, 2010. "Fair Value of Real Estate and Utility of Financial Statements of Construction Companies," International Real Estate Review, Asian Real Estate Society, vol. 13(3), pages 323-350.
  • Handle: RePEc:ire:issued:v:13:n:03:2010:p:323-350
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    File URL: http://www.umac.mo/fba/irer/papers/current/vol13n3_pdf/4-100110%20Fair%20Value.pdf
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    Cited by:

    1. Robert Edelstein & Steve Fortin & Desmond Tsang, 2012. "An International Exploration of Financial Reporting Practices in the Real Estate Industry," International Real Estate Review, Asian Real Estate Society, vol. 15(3), pages 347-372.

    More about this item

    JEL classification:

    • L85 - Industrial Organization - - Industry Studies: Services - - - Real Estate Services

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