The concept of "fair value" marked a major departure from traditional cost accounting. In theory, under this approach a balance sheet that better reflects the current value of assets and liabilities. Critics of fair value argue that it is less useful over longer time frames and prone to distortion by market inefficiencies resulting in procyclicality in the financial system by exacerbating market swings.

Comprising contributions from a unique mixture of academics, standard setters and practitioners, and edited by internationally recognized experts, this book, on a controversial and intensely debated topic, is a comprehensive reference source which:

  • examines the use of fair value in international financial reporting standards and the US standard SFAS 157 Fair Value Measurement, setting out the case for and against
  • looks at fair value from a number of different theoretical and practical perspectives, including a critical review of the merits and arguments against the use of fair value accounting
  • explores fair value accounting in practice, involvement in the Great Financial Crisis, implications for managerial reporting discretion, compensation and investment

This volume is an indispensable reference that is deserving of a place on the bookshelves of both libraries and all those working in, studying, or researching the areas of international accounting, financial accounting and reporting.

part |21 pages


part I|66 pages

Standards and conceptual issues

chapter 3|15 pages

Fair value accounting

A standard-setting perspective

chapter 5|16 pages

Shareholder value, financialization and accounting regulation

Making sense of fair value adoption in the European Union

part III|49 pages


chapter 11|15 pages

The ‘fairness’ of fair value accounting

Marking-to-market, marking-to-model and financial reporting management

chapter 12|14 pages

Let the fox guard the henhouse

How relaxing the three-level fair value hierarchy increases the reliability of fair value estimates

part IV|102 pages

Specific topics