This paper investigates whether, and if so, to what extent, Level 3 fair values disclosed by European banks provide useful information to investors and are reflected in firm value changes. Using a unique sample of 416 hand-collected firm-year observations from European banks reporting under...

Ab 2018 sollen Kreditinstitute in der internationalen Rechnungslegung eine Risikovor-sorge für erwartete Verluste bilden. Diese Risikovorsorge für erwartete Verluste wird hier verknüpft mit dem finanzwirtschaftlichen Kalkül in der Kreditvergabeentschei-dung. Auf Basis dieses...

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...

Der Periodenerfolg im Kreditgeschäft hängt nicht nur von den Zinserträgen, sondern auch von der Bewertung der Kreditforderungen unter Berücksichtigung des Ausfallrisikos ab. Hier werden Wertberichtigungen für eingetretene Verluste, für erwartete Verluste, und solche zur Berücksichtigung...

Many observers have argued that the fall in RMBS prices during the crisis was partly caused by fire sales. We provide an explanation for why financial institutions may have engaged in fire sales using a unique dataset of RMBS transactions for insurance companies. We show that risk-sensitive...

The principles characterizing the traditional revenue-expense approach to accounting have never been "invented". They are an institution that is the result of social evolution, not of human design. Therefore, the efforts to defend them against the balance sheet approach endorsed by...

Since 2010 a number of firms have voluntarily adopted mark-to-market (MTM) accounting for the actuarial gains and losses associated with their defined benefit pension plans. While pension accounting rules have allowed such a choice since 1986, only recently have firms begun to exercise that...

We directly test the reliability and relevance of fair values reported by listed private equity firms (LPEs), where the unit of account for the fair value measurement (FVM) is an investment stake in an individual investee company. FVMs are observable for multiple investment stakes, fair values...

Whether fair value accounting should be used in financial reporting has been the subject of debate for many years. A key dimension to this debate is whether fair value earnings can provide information to financial statement users that is helpful in making their economic decisions. A criticism of...

This study creates and analyzes a model in which the income from intellectual property (IP) owned by a domestic parent and foreign subsidiary must be shared between the domestic and foreign countries for tax purposes. The model focuses on the effects of the commensurate with income standard,...