Do measurement-related fair value disclosures affect information asymmetry?

Vergauwe, Skralan Nancy and Gaeremynck, Ann (2019) Do measurement-related fair value disclosures affect information asymmetry? Accounting and Business Research, 49 (1). pp. 68-94. ISSN 0001-4788

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Abstract

Using a sample of European real estate firms over the 2007–2010 period, this study provides some evidence that measurement-related fair value disclosures reduce information asymmetry. We find a negative association between the extent of fair value disclosures and the bid-ask spread, but no association with two additional measures of information asymmetry (zero returns and price impact). Contrary to our expectation, we fail to find evidence that firms using model estimates exclusively benefit the most from such additional disclosure. Analysing measurement errors (the absolute difference between the selling price of an asset and its fair value prior to sale), we find that firms that use model estimates exclusively and provide more measurement-related disclosures have lower errors and more accurate fair value estimates. In other words, if our lack of results is due to investors not using this additional disclosure this is to their detriment.

Item Type:
Journal Article
Journal or Publication Title:
Accounting and Business Research
Additional Information:
This is an Accepted Manuscript of an article published by Taylor & Francis in Accounting and Business Research on 20/02/2018, available online: http://www.tandfonline.com/10.1080/00014788.1434608
Uncontrolled Keywords:
/dk/atira/pure/subjectarea/asjc/1400/1402
Subjects:
ID Code:
89766
Deposited By:
Deposited On:
18 Jan 2018 10:00
Refereed?:
Yes
Published?:
Published
Last Modified:
27 Sep 2020 04:18