IDEAS home Printed from https://ideas.repec.org/a/spt/apfiba/v3y2013i1f3_1_12.html
   My bibliography  Save this article

Accounting Conservatism, Market Liquidity and Informativeness of Asset Price: Implications on Mark to Market Accounting

Author

Listed:
  • Guo Ying Luo

Abstract

This paper theoretically examines the impact of conservatism on the asset price in an asset market allowing for strategic interactions among traders. Due to the trades coming from conservatism traders contain less informational content, the asset price is shown to be less informative in the presence of conservatism traders. In addition, this paper shows that the market liquidity increases as the proportion of conservatism traders increases. With mark to market accounting replacing the conservative accounting practice, the asset price will be more informative and the market liquidity will be reduced. From the perspective of the informativeness of the asset price, the results of this paper support mark to market accounting.

Suggested Citation

  • Guo Ying Luo, 2013. "Accounting Conservatism, Market Liquidity and Informativeness of Asset Price: Implications on Mark to Market Accounting," Journal of Applied Finance & Banking, SCIENPRESS Ltd, vol. 3(1), pages 1-12.
    • Handle: RePEc:spt:apfiba:v:3:y:2013:i:1:f:3_1_12
    as

    Download full text from publisher

    File URL: http://www.scienpress.com/Upload/JAFB%2fVol%203_1_12.pdf
    Download Restriction: no
    ---><---

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:spt:apfiba:v:3:y:2013:i:1:f:3_1_12. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Eleftherios Spyromitros-Xioufis (email available below). General contact details of provider: http://www.scienpress.com/ .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.