Fair Value and Its Economic Consequence on the Volatility Measures of Earnings, Stock Price and Government Debt Yield
Read full paper at: http://www.scirp.org/journal/PaperInformation.aspx?PaperID=52449#.VJjGVcCAM4 Author(s) Lan Sun * Affiliation(s) UNE Business School, University of New England, Armidale, Australia . ABSTRACT Many banks and commentators argued that fair value accounting was the root caused the procyclical decline in bank assets and capitals, the failures of large financial sector and extreme volatility in financial asset prices during the GFC. Fair value measurements may result in different figures for earnings and capital, both of which are important as buffers against insolvency. Fair value may also convey different messages to the market, either value relevance or volatility, it will lead to different econom...