RT Journal Article
SR Electronic
T1 Transparency, Level 3 Assets, and the Investor
JF The Journal of Wealth Management
FD Institutional Investor Journals
SP 77
OP 79
DO 10.3905/jwm.2013.16.2.077
VO 16
IS 2
A1 Tom Arnold
A1 John H. Earl, Jr
YR 2014
UL https://pm-research.com/content/16/2/77.abstract
AB This Fair Value Accounting (FVA) advocacy comes from a belief that reflecting market prices as much as possible within financial statements leads to increased transparency for the investor. Firms (primarily banks) argue that illiquidity prevents such a notion and that FVA taken to an extreme leaves firms at the mercy of a market in disequilibrium, which will unjustifiably diminish balance sheet value. These issues are investigated and ultimately it is concluded that nether system, complete FVA or no FVA, will create complete transparency.TOPICS: Fundamental equity analysis, legal/regulatory/public policy