The paper analyses the effects of three sets of accounting rules for financial instruments - Old IAS before IAS 39 became effective, Current IAS or US GAAP, and the Full Fair Value (FFV) model proposed by the Joint Working Group (JWG) - on the financial statements of banks. We develop a...

One objection to fair value accounting for liabilities is that changes in a company’s credit risk are recognized as gains or losses in a manner that is counterintuitive to the way gains and losses are typically interpreted (Lipe 2002). Specifically, when a company’s credit risk increases...

Under the fair value option, SFAS No. 159, firms have full discretion over electing to report specified financial instruments at fair value on a contract-by-contract basis. Building on Henry's (2009) study of early adopting banks, this paper examines to what extent firms' election of instruments...

This paper examines the opinions of Chief Financial Officers (CFOs) of public companies in the U.S. with respect to the choice of fair value accounting for non-financial assets. Based on 209 surveyed firms, we first show that the majority of CFOs are resistant to fair value accounting for...

How do accounting principles become generally accepted? This study develops an analytical framework for the process of general acceptance based on research into social movements. Social movement theory (SMT) has its roots in management and sociology research. We draw on SMT to develop a...

Under the fair value option, SFAS No. 159, firms have full discretion over electing to report specified financial instruments at fair value on a contract-by-contract basis. Building on Henry's (2009) study of early adopting banks, this paper examines to what extent firms' election of instruments...