...-based aggregate earnings for future GDP growth is due to fair value-based accruals, which we proxy with IFRS-driven special items. In additional analyses, we find that our main results are stronger for adopting countries with greater differences between local accounting standards and IFRS and robust...

..., we contribute to the literature that examines the role of fair value accounting in bank regulation. Several studies conclude that fair value accounting played little or no role in causing the financial crisis ( Laux and Leuz 2009 , 2010 ; Badertscher, Burks, and Easton 2012 ; Shaffer 2012...

...Leslie D. Hodder; Amy G. Sheneman ABSTRACT Studies find evidence that opportunistic reporting often accompanies fair value measurement. However, research has not determined whether the source of this opportunism is the estimate of fair value. Using detailed information on insurers' investment...

...Patricia M. Dechow; Chad R. Larson; Robert J. Resutek ABSTRACT We investigate the impact of the mixed attribute GAAP measurement model on accrual quality inferences. GAAP rules vary from an income statement “matching” focus to a balance sheet “fair-value” focus. Accrual properties are also...

...Jaehan Ahn; Rani Hoitash; Udi Hoitash ABSTRACT PCAOB inspections repeatedly indicate deficiencies in audits of fair-value (FV) estimates, prompting regulators to improve the related auditing standards. We predict that auditor task-specific FV expertise, gained from work experience during the audit...

...Tim Jenkinson; Wayne R. Landsman; Brian R. Rountree; Kazbi Soonawalla ABSTRACT This study analyzes whether fair value estimates of fund net asset values (NAVs) produced by private equity managers are accurate and unbiased predictors of future discounted cash flows (DCFs). We exploit the fact...

... auditor for a hypothetical client and assessed the discount rate of an investment using benchmarking analysis. Participants read client background information, including information on the management team and select financial information. This information was followed by a discussion of the fair value...

...Urooj Khan; Stephen G. Ryan; Abhishek Varma ABSTRACT We investigate the impact of recurring fair value versus amortized cost measurement for accounting recognition purposes on the timeliness of insurers' other-than-temporary (OTT) impairments of non-agency residential mortgage-backed securities...

.... Supplemental material can be accessed by clicking the link in Appendix B. Editor's note: Accepted by Elaine G. Mauldin, under the Senior Editorship of Mark L. DeFond. July 2016 September 2018 2019 audit reports disclosure measurement uncertainty fair value When...

...John M. McInnis; Yong Yu; Christopher G. Yust ABSTRACT Standard setters contend that fair value accounting yields the most relevant measurement for financial instruments. We examine this claim by comparing the value relevance of banks' financial statements under fair value accounting...

... cash flow models on 1.7 audits. Table 1 reports additional demographic data describing participants in both experiments. Overall, participants appear to have sufficient experience with fair values and specialists to meaningfully complete the experiment, and have backgrounds similar to participants...

...Maximilian A. Müller; Edward J. Riedl; Thorsten Sellhorn ABSTRACT This paper examines pricing differences across recognized and disclosed fair values. We build on prior literature by examining two theoretical causes of such differences: lower reliability of the disclosed information...

... these assets at fair value (historical cost). We assess the accuracy of a balance-sheet-based forecast (net asset value, or NAV) and an income-statement-based forecast (earnings per share, or EPS). We predict and find higher NAV forecast accuracy for U.K. relative to U.S. firms, consistent with the fair value...

...Brett W. Cantrell; John M. McInnis; Christopher G. Yust ABSTRACT Standard-setters and many investors argue that loan fair values provide more useful information about credit losses than historical cost information, while bankers and others generally disagree. We examine the ability of reported...

.... Editor's note: Accepted by Laureen A. Maines. advice fair value trust heuristic auditor judgment audit quality social bond Auditors regularly seek informal advice ( Gibbins and Emby 1985 ), including additional information...

... for financial reporting. Despite their importance, very little research has addressed how financial statement users apply these constructs. Via experiments set within the fair value context, we show that users do not view them as independent constructs. Instead, variations in properties that are associated...

...Judson Caskey; John S. Hughes ABSTRACT We examine how alternative accounting measures of fair value impact the ability of debt covenants to mitigate inefficient investment decisions. In our setting, shareholders make a non-contractible project choice after signing a debt contract. At a later date...

...Lisa Koonce; Karen K. Nelson; Catherine M. Shakespeare ABSTRACT We conduct three experiments to test if investors' views about fair value are contingent on whether the financial instrument in question is an asset or liability, whether fair values produce gains or losses, and whether the item...