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Fair Value Accounting and Its Usefulness to Financial Statement Users

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This paper aims to discuss fair value accounting and its usefulness to financial statement users. The European Commission has recently endorsed IFRS 13 on fair value measurement and is considering the endorsement of IFRS 9, which extends the use of fair value for financial instruments. Furthermore, fair value accounting has been under deep scrutiny because of its alleged role in the financial crisis. Therefore, the usefulness of fair value accounting is a key issue for standard setting purposes. This paper delineates the theoretical background for fair value accounting, it provides empirical evidence on its usefulness, it highlights some controversial issues and makes some proposals for standard setting discussion.

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  • Palea, Vera, 2013. "Fair Value Accounting and Its Usefulness to Financial Statement Users," Department of Economics and Statistics Cognetti de Martiis. Working Papers 201327, University of Turin.
    • Handle: RePEc:uto:dipeco:201327
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    2. Barth, Mary E. & Beaver, William H. & Landsman, Wayne R., 2001. "The relevance of the value relevance literature for financial accounting standard setting: another view," Journal of Accounting and Economics, Elsevier, vol. 31(1-3), pages 77-104, September.
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    7. Benston, George J., 2008. "The shortcomings of fair-value accounting described in SFAS 157," Journal of Accounting and Public Policy, Elsevier, vol. 27(2), pages 101-114.
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    Cited by:

    1. Dehong Wang & Jianbo Song & Yue Zhang, 2017. "Does Market Welcome the International Convergence of Fair Value Standard in China?," Applied Finance and Accounting, Redfame publishing, vol. 3(2), pages 1-13, August.

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