Get 20M+ Full-Text Papers For Less Than $1.50/day. Start a 14-Day Trial for You or Your Team.

Learn More →

The Decision Usefulness of Financial Accounting Measurement Concepts: Evidence from an Online Survey of Professional Investors and their Advisors

The Decision Usefulness of Financial Accounting Measurement Concepts: Evidence from an Online... In their current framework project, the IASB and the FASB identify decision usefulness as the objective of financial reporting. Unfortunately, accounting research has neither yet come up with an undisputed measure of decision usefulness, nor with a satisfying method to rank competing measurement concepts, such as fair value or historical cost, with regard to their relative decision usefulness. Thus, assessing the decision usefulness of different accounting measurement concepts ultimately poses an empirical question. We provide evidence to this question by surveying an important user group, namely professional investors and their advisors, about their opinions on the decision usefulness of different accounting measurement concepts. We find that our respondents clearly differentiate between mark-to-market and mark-to-model fair values. While they consistently rank mark-to-market fair values as most decision-useful, they generally rank mark-to-model fair values as least decision-useful. In addition, the ranking differs across asset classes. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png European Accounting Review Taylor & Francis

The Decision Usefulness of Financial Accounting Measurement Concepts: Evidence from an Online Survey of Professional Investors and their Advisors

European Accounting Review , Volume 19 (3): 15 – Sep 1, 2010
15 pages

Loading next page...
 
/lp/taylor-francis/the-decision-usefulness-of-financial-accounting-measurement-concepts-0sfGjaXxXa

References (38)

Publisher
Taylor & Francis
Copyright
Copyright European Accounting Association
ISSN
1468-4497
eISSN
0963-8180
DOI
10.1080/09638180.2010.496548
Publisher site
See Article on Publisher Site

Abstract

In their current framework project, the IASB and the FASB identify decision usefulness as the objective of financial reporting. Unfortunately, accounting research has neither yet come up with an undisputed measure of decision usefulness, nor with a satisfying method to rank competing measurement concepts, such as fair value or historical cost, with regard to their relative decision usefulness. Thus, assessing the decision usefulness of different accounting measurement concepts ultimately poses an empirical question. We provide evidence to this question by surveying an important user group, namely professional investors and their advisors, about their opinions on the decision usefulness of different accounting measurement concepts. We find that our respondents clearly differentiate between mark-to-market and mark-to-model fair values. While they consistently rank mark-to-market fair values as most decision-useful, they generally rank mark-to-model fair values as least decision-useful. In addition, the ranking differs across asset classes.

Journal

European Accounting ReviewTaylor & Francis

Published: Sep 1, 2010

There are no references for this article.