thecrisisoffairvalueaccounting_makingsenseoftherecentdebate-外文文献(编辑修改稿)

thecrisisoffairvalueaccounting_makingsenseoftherecentdebate-外文文献(编辑修改稿)内容摘要：

arency and whether it leads undesirable actions on the part of banks and firms. Opponents claim that fair value is not relevant and potentially misleading for assets that are held for a long period and, in particular, to maturity。 that prices could be distorted by market inefficiencies, investor irrationality or liquidity problems。 that fair values based on models are not reliable。 and that FVA contributes to the procyclicality of the financial system.4 3. Historical cost accounting as an alternative In discussing the potential problems of FVA, it is important to also consider the alternative. Naturally, the relevant alternative depends on the assets in question. Few would argue that historical cost accounting (HCA) is an alternative for liquid assets (., stocks) in banks’ trading books. But for many, HCA is an alternative for loans, in particular, if they are held to maturity. Similarly, if we were to suspend FVA for illiquid assets in times of crisis as many have suggested, what values would we use instead? Even if one is sympathetic to the arguments against FVA, it does not automatically follow that HCA would be better, although many opponents of FVA implicitly or explicitly assume so. At times, FVA may not provide relevant information, but in many cases, (amortized) historical costs do not provide relevant information either. Moreover, even when an investor intends to hold financial assets until her retirement, she may still have an interest in the current value of these assets. Why does this logic not also apply 4 For summaries of the pros and cons of FVA and further references, see Barth (2020), Penman (2020), Benston (2020), and Ryan (2020). There is also a large literature on the value relevance of accounting numbers, which often analyzes fair values. See surveys by Barth et al. (2020) and Holthausen and Watts (2020). 6to disclosures about a firm’s financial assets? That is, even for assets that are held to maturity (., loans), investors might care about current market values, be it to evaluate past decisions in light of current market conditions or because investors have some doubts that the firm (or bank) can hold these assets to maturity. Similarly, when bank regulators set capital requirements based on expected future losses at the time of the transaction, we would expect them to adjust required capital when expectations about future losses change – and not just when losses are realized. It is surprising that some mentators seem to believe that HCA is a sound basis for capital requirements or that the liquidity of an asset should play no role when market values and liquidity play an important role in determining (ongoing) margin or collateral requirements.5 Aside from highlighting some of the shortings of HCA, these examples also illustrate that it is important to be explicit about the presumed goal(s) of accounting when we debate the merits of FVA and other alternatives, such as HCA, because their relative merits likely depend on the goal(s) of accounting. Furthermore, take the concern that observed prices may not always reflect true fundamental values and that in those cases markingtomarket is not appropriate. Clearly, it is conceivable that, at times, observed market prices deviate from fundamentals. That is, markets may not be efficient with respect to publicly available information at all times. There are transaction costs and limits to arbitrage, and market prices may be subject to behavioral biases and investor irrationality (., Shleifer, 2020。 Barberis and Thaler, 2020). Moreover, a liquidity crunch can affect market prices (., Shleifer and Vishny, 1992). 5 It is worth pointing out that collateral and margin calls can trigger a downward spiral, ., increased collateral or margin requirements and falling prices can reinforce each other (Shleifer and Vishny, 1992。 Brunnermeier and Pedersen, forthing). However, this spiral is not related to the accounting system。 it results from the use of market values in bilateral contracts. See Section 4 for a discussion of how FVA in financial crises. 7The important question, however, is how to deal with this problem. Potential market inefficiencies can be addressed in a variety of ways and again HCA is not the only alternative. Historical costs do not reflect the current fundamental value of an asset either. Therefore, it might be better to use market values, even if the markets are illiquid, and to supplement them with additional disclosures, ., about the fundamental value of the asset when held to maturity. FVA does not prevent firms from providing additional information, including management’s estimates of fundamental values.6 One might counter this argument with the concern that investors may overlook information in the notes to the financial statements or that they would overreact to fair values based on current market prices despite the disclosure of (higher) fundamental values in the notes. However, we are not aware of any empirical evidence that investors systematically ignore or overlook information in the notes. Having said that, there is a legitimate debate over whether the market fully and correctly impounds financial information in price (., Kothari, 2020). For instance, the market could overreact (., DeBondt and Thaler, 1985). But it is also possible that market reactions are even more extreme if current market prices or fair value estimates are not disclosed to the market. We are not aware of any empirical evidence that investors would be calmer under HCA. Investors are not na239。 ve。 they know about the problems, ., in the subprimeloan market, and hence will draw inferences even in the absence of fairvalue disclosures (and in that case might a。