publication . Article . Other literature type . 2011

Mandatory Fair Value Accounting and Information Asymmetry: Evidence from the European Real Estate Industry

Muller, Karl A.; Riedl, Edward J.; Sellhorn, Thorsten;
Open Access
  • Published: 01 Jun 2011 Journal: Management Science, volume 57, issue 6 June, pages 1,138-1,153
Abstract
We examine the effects of mandating the provision of fair value information for long-lived tangible assets on firms' information asymmetry. Specifically, we investigate whether European real estate firms' compulsory adoption of International Accounting Standard 40 (IAS 40; Investment Property), which mandated the provision of investment property fair values in 2005, resulted in reduced information asymmetry across market participants. Using as a control group firms that voluntarily provided these fair values prior to the mandatory adoption of IAS 40, we find that mandatory adoption firms exhibit a larger decline in information asymmetry, as reflected in lower bi...
Subjects
free text keywords: fair value, disclosure, IFRS, information asymmetry, investment property, Management Science and Operations Research, Strategy and Management, Accounting, business.industry, business, Microeconomics, Mandatory reporting, Mark-to-market accounting, Economics, Real estate, International accounting, Information asymmetry, Fair value
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publication . Article . Other literature type . 2011

Mandatory Fair Value Accounting and Information Asymmetry: Evidence from the European Real Estate Industry

Muller, Karl A.; Riedl, Edward J.; Sellhorn, Thorsten;