Fair Value Accounting:Theory Analysis and Empirical Evidence

Fair value accounting has been argued for a long time between accounting standards setters and banking regulation bodies.Literatures of empirical studies on fair value accounting are reviewed comprehensively and systematically in this paper.The change from historical cost accounting to fair value accounting did exert a significant effect on banking,regulating and the whole financial system.It is suggested that further study on the effect of fair value accounting is encouraged before deciding whether fair value is significantly expanded into the primary financial statements.