Income statement effects of derivative fair value accounting: evidence from bank holding companies

SFAS 133 requires most types of hedge ineffectiveness to be measured on a fair value basis and reported in earnings. This earnings recognition requirement was the focal point of controversy surrounding the adoption of SFAS 133. The debate also reflects the more general controversy over whether to recognize fair-value-based gains or losses into earnings. Using a sample of bank holding companies, I find evidence that the recognition of the fair-value-based hedging performance measure under SFAS 133 improves the value and risk relevance of accounting earnings. The findings of this study are relevant to the evaluation of SFAS 133 as well as the ongoing debate on the income statement treatment of net asset changes due to the application of fair value accounting.

Name thesis:degree_name

Ph.D.

Level thesis:degree_level

Dissertation

Discipline thesis:degree_discipline

Accountancy

Grantor

University of Illinois at Urbana-Champaign

Year dc:date

2011

Author dc:creator

• Zhou, Hui

Contributors dc:contributor

• Narayanamoorthy, Ganapathi S.
• Sougiannis, Theodore
• Chan, Kuo Chi
• Li, Wei

• Fair-value Income Measures
• Statement of Financial Accounting Standards No. 133 (SFAS 133)
• Derivatives

Statement dc:rights

• Copyright 2011 Hui Zhou

Language dc:language

en

Handle dc:identifier

http://hdl.handle.net/2142/26094

OAI identifier oai:identifier

oai:www.ideals.illinois.edu:2142/26094