The value relevance of fair value and historical cost measurements during the financial crisis
Year: 2020
Type: article
Abstract: The roles played by fair value (FV) and historical cost (HC) measurements during the financial crisis (2008–2009) remain controversial. We investigate the relative and incremental value relevance of assets and liabilities measured at FV and HC for financial institutions from 25 European countries before and during the financial crisis. We find that FV is more relatively value relevant than HC during the crisis but not before. HC and FV are, however, incrementally value relevant to each other both before and during the financial crisis. Our results are influenced by cross‐country differences.
Source: Accounting and Finance
DOI: 10.1111/acfi.12655
Authors: Lin Liao, Helen Kang, Richard D. Morris
Institutions: Southwestern University of Finance and Economics, UNSW Sydney
Language: English
Subfield: Accounting
Domain: Social Sciences
Open Access status: bronze
OpenAlex ID: W3038440378