Is There a Future for Fair Value Accounting After the 2008–2009 Financial Crisis?
This paper evaluates the role of fair value accounting in recent financial crisis, and examines whether the call for its demise is justified. Critics argue that fair accounting regulation added to the volatility in financial markets and aggravated financial crisis. On the other hand, supporters of this regulation argue that fair value accounting has been the victim of the recent financial crisis. They believe that this regulation is important for providing transparent, reliable, and accurate information on asset values to investors.After evaluating the impact of fair value accounting regulation on financial crisis, we examine negative and positive aspects of this regulation. Our discussion shows that fair value accounting provides useful information during stable market conditions, but its usefulness may become questionable during unstable and volatile financial markets. Overall, this regulation has the support of financial professional bodies. Some professionals are, however, concerned about recent modification to the fair value accounting rule, i.e., FAS 157-4, because this modification may not enhance reliability and accuracy of financial information. Despite recent modification, discussion on fair value accounting is far from over. Critics of the regulation still believe that this regulation should be eliminated, but the positive aspects of this regulation support its continuation.
If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
Volume (Year): 13 (2010)
Issue (Month): 03 ()
|Contact details of provider:|| Web page: http://www.worldscinet.com/rpbfmp/rpbfmp.shtml|
|Order Information:|| Email: |
When requesting a correction, please mention this item's handle: RePEc:wsi:rpbfmp:v:13:y:2010:i:03:p:469-493. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Tai Tone Lim)
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.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with 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 profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.