publication . Article . 2008

Fair Value Accounting for Financial Instruments – Conceptual Approach and Implications

Dumitru MATIS; Carmen Giorgiana BONACI;
Open Access
  • Published: 01 Jan 2008 Journal: Timisoara Journal of Economics, volume 1, issue 2, pages 191-206
Abstract
This study complements the growing literature on the value relevance of fair value by examining the validity of the hypothesis that fair value is more informative than historical cost as a financial reporting standard for financial instruments. We therefore compare the relative explanatory power of fair value and historical cost in explaining equity values. In order to reflect fair values’ role in offering the fair view where financial instruments are concerned we briefly reviewed capital market studies that examine the usefulness of fair value accounting to investors, and discuss marking-to-market implementation issues of determining financial instruments’ fair...
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