Fair value accounting
Subtitle: key issues arising from the financial crisis
By: Elisa Menicucci, Polytechnic University of Marche, Italy
Series: Palgrave Macmillan studies in banking and financial institutions; Palgrave Macmillan studies in banking and financial institutions
Publisher: Palgrave Macmillan Limited
Published: 2015
Language: eng
Number of pages: 121
ISBN-13: 9781137448255
Subjects: Accounting; Global Financial Crisis, 2008-2009; Valuation; Banks and banking
Description: The 2008 financial crisis has turned a spotlight on the role of financial reporting in periods of economic downturn. In analysing the financial crisis, many commentators have attributed blame to fair value accounting (FVA) because of the pro-cyclical effect it potentially introduces in banks' financial statements. Investigating the effect of FVA on the volatility of earnings and regulatory capital in European banks, the book asks whether incremental volatility is indeed reflected in bank share prices. It examines empirical evidence to quantify the role that FVA may have played in times of stress in the banking sector, both in Europe and elsewhere. Fair Value Accounting explores the criticism FVA has received despite its perceived merits, and summarizes the various opposing views of parties in this major policy debate, which has involved banking and accounting regulators from across the globe.--From back cover.
Notes: Includes bibliographical references (pages 109-117) and index.
Table of contents: title: 1. Financial crisis and fair value accounting (FVA); title: Introduction; title: Background information about the financial crisis; title: Features of the financial crisis; title: The debate on the role of FVA in the financial crisis; title: Concluding remarks; title: 2. Fair value accounting (FVA): An overview of key issues; title: Introduction; title: Fair value in contemporary accounting standards; title: Theoretical foundations underlying FVA; title: Definition of fair value; title: THe use of FVA: Fair value hierarchy; title: The use of fair value in IAS/IFRS; title: Historical cost accounting (HCA); title: FVA versus HCA; title: Concluding remarks; title: 3. The role of fair value accounting (FVA) in the financial crisis; title: Introduction; title: FVA and implications in the financial crisis; title: Fair value in normal economic conditions; title: Fair value in financial crisis conditions; title: Key observations on fair value arising from the financial crisis: volatility and pro-cyclicality; title: Concluding remarks; title: 4. Fair value accounting (FVA) in the banking sector; title: Introduction; title: The impact of FVA on banks' financial statements; title: FVA and volatility in earnings and regulatory capital; title: FVA and financial stability; title: Practical implications and perspectives for FVA; title: Lessons from the financial crisis; title: Concluding remarks.