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...

This paper experimentally investigates how fair value measurements of financial instruments affect the decision of nonprofessional investors to invest in a bank’s shares. Specifically, we assess how investors respond to variations in net income resulting from fair value adjustments in trading...

We investigate the economic consequences of the implementation of a particular aspect of Basel III in the U.S. Specifically, the Basel III proposal and the corresponding U.S. rule (hereafter referred to as the removal of the AOCI filter) to make the inclusion of unrealized fair value gains and...

Fair value measurement became pervasive to financial reporting over last 20 years. Under fair value accounting, entities are obliged or permitted to measure particular assets and liabilities at their fair values as at the reporting dates. Fair value is a current market-based hypothetical value....

Several recent studies have empirically examined the claim that fair value accounting (FVA) contributed to the financial crisis of 2008. Most of this research relies on stock price and/or financial statement data from commercial banks to investigate the role played by FVA in this financial...

Fair value estimates of debt and equity securities play an increasingly important role in the economy. For example, International Financial Reporting Standards require companies to report many of their investments at fair value on the balance sheet or to use fair values in goodwill impairment...

In this paper, I examine the relations between risk management disclosures, governance, and the market pricing of the fair value gains and losses (FVGL) for US commercial bank holding companies (banks). I find that banks with strong corporate governance disclose more about their risk management...

This study investigates whether managers use asset securitization gains to substitute loan loss provision (LLP) management for earnings management, and, if so, whether the percentage of credit risk retained affects such a relationship. The literature provides evidence that managers have used...