We found a match
Your institution may have access to this item. Find your institution then sign in to continue.
- Title
Fair Value Measurement Discretion and Opportunistic Avoidance of Impairment Loss Recognition.
- Authors
Hodder, Leslie D.; Sheneman, Amy G.
- Abstract
Studies find evidence that opportunistic reporting often accompanies fair value measurement. However, research has not determined whether the source of this opportunism is the estimate of fair value. Using detailed information on insurers' investment holdings, we separate the use of fair value measurement discretion from the application of non-measurement-related discretion in accounting for impairments of financial assets. Our evidence contradicts the view that fair value measurement discretion plays a large role in opportunistic avoidance of impairment recognition for investment securities. Instead, managers appear to avoid recording impairment losses by opportunistically applying subjective criteria regarding perceived loss persistence and intent to hold. Data Availability: Data are available from sources identified in the paper. JEL Classifications: G20; G22; G30; M41.
- Subjects
FAIR value accounting; INSURANCE company investments; DISCRETION; ASSETS (Accounting); INSURANCE company personnel; EARNINGS management; FAIR value; LOSS recognition
- Publication
Accounting Review, 2022, Vol 97, Issue 7, p243
- ISSN
0001-4826
- Publication type
Article
- DOI
10.2308/TAR-2019-0444