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Cited by 6Accounting Theory and Financial ReportingAuditing, Earnings Management, GovernanceFinancial Reporting and Valuation Research

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A Survey of Research on Fair Value Accounting for Financial Institutions*

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Henderson, Darren, Mamo, Kaleab·2025·Accounting Perspectives
DOI 10.1111/1911-3838.12391
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Abstract

Even though fair value accounting (FVA) enjoys widespread support from standard setters around the world, the practice of marking assets and liabilities to market remains controversial. While FVA affects all firms to a certain extent, financial institutions are most affected due to the nature of the assets that they hold. In this paper, we first discuss fair value measurement and its application before exploring the consequences of FVA, including its impact on regulatory capital. We then discuss key benefits and challenges of FVA. Standard setters believe that FVA provides the most relevant information to financial statement users; however, the increased relevance comes with a cost of reduced reliability due to the estimation involved. More recently, concerns have been raised about FVA leading to procyclicality and contagion that can cause or exacerbate boom and bust cycles. After summarizing the literature, we identify opportunities for additional research.

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Metadata

Authors
Henderson, D., & Mamo, K.
Affiliations
Wilfrid Laurier University (CA)
Corresponding author
Henderson, Darren
ORCID
Henderson, Darren
Venue
Accounting Perspectives
Publisher
Wiley
Published
2025-03-31
Volume
24
Issue
2
Pages
307-342
ISSN
  • 1499-8653 (ISSN-L)
  • 1911-382X
  • 1911-3838
DOI
10.1111/1911-3838.12391
OpenAlex
W4409051253
Cited by
6
References
116
Citations by year
2026: 4 · 2025: 2
FWCI
5.84
Type
journal article
Language
en
Open access
Licence
Locations
Accounting Perspectives (publishedVersion, cc-by-nc-nd)
Topics
  • Social Sciences › Business, Management and Accounting › Accounting › Accounting Theory and Financial Reporting
  • Social Sciences › Business, Management and Accounting › Accounting › Auditing, Earnings Management, Governance
  • Social Sciences › Business, Management and Accounting › Strategy and Management › Financial Reporting and Valuation Research
Keywords
fair value accounting, financial institutions, fair value measurement, regulatory capital, estimation uncertainty, procyclicality, financial contagion, financial statement users

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CoChat. (2026). Citation check: A Survey of Research on Fair Value Accounting for Financial Institutions*. https://app.cochat.ai/papers/10.1111/1911-3838.12391
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Henderson, D., & Mamo, K. (2025). A Survey of Research on Fair Value Accounting for Financial Institutions*. Accounting Perspectives. https://doi.org/10.1111/1911-3838.12391