[This study investigates how disclosed fair value estimates of banks' investment securities and securities gains and losses based on those estimates are reflected in share prices in comparison with historical costs. Fair value securities gains and losses are calculable because banks also disclose realized securities gains and losses. Thus, banks' investment securities provide an opportunity to examine two measurement methods, historical cost and fair value, for both an asset and its related earnings component. Previous research does not provide strong evidence on value-relevance of asset fair value estimates. Errors in estimating the fair values is the primary explanation for this unexpected finding. Another explanation relates to cross-sectional differences in sample firms, e.g., industry membership. This study examines disclosed fair values of investment securities that can be considered more reliable than previously-studied fair value disclosures. Moreover, the sample firms here belong to one industry, banking. This study also investigates the Barth et al. (1990) suggestion that fair value securities gains and losses are value-relevant. By examining how share prices reflect historical costs and fair values, evidence is provided on the measures' relevance and reliability. Because these are the FASB's two principal criteria for choosing among accounting alternatives [Statement of Financial Accounting Concepts (SFAC) No. 2, FASB 1980], the evidence can inform the FASB's deliberations on using fair value accounting for investment securities, to the extent the disclosed fair value estimates would be used to measure investment securities under fair value accounting. Share prices for a sample of banks are explained using investment securities historical costs and fair value estimates together with the book value of equity before investment securities. Similarly, bank stock returns are explained using securities gains and losses based on historical costs and on fair values together with earnings before securities gains and losses. The analyses provide evidence on the two methods' incremental and relative explanatory power, and relative measurement error. The findings indicate that fair value estimates of investment securities provide significant explanatory power beyond that provided by historical costs. Strikingly, historical costs provide no significant explanatory power incremental to fair values. Using a measurement error model, investment securities' fair values are found to have less measurement error than historical costs vis-a-vis the amount reflected in share prices. The findings for securities gains and losses are different. The significance of any incremental explanatory power for fair values beyond historical costs depends on the specification of the estimating equation. In some specifications, fair value securities gains and losses have no significant incremental explanatory power, but historical costs always provide explanatory power incremental to fair values. The findings based on a measurement error model indicate that fair value securities gains and losses also have more measurement error than historical costs. Thus, although fair value estimates of investment securities appear reliable and relevant to investors in valuing bank equity, fair value securities gains and losses do not. One interpretation for these findings is that although estimation error in the disclosed fair values is small enough that investment securities' fair values appear value-relevant, when two annual fair value estimates are used to calculate securities gains and losses, the effect of the combined estimation errors renders securities gains and losses value-irrelevant. Another plausible interpretation is that securities gains and losses might be offset by unrecognized correlated gains and losses on other assets and liabilities. Why this affects securities gains and losses but not investment securities is an unresolved question. Evidence from supplemental analyses gives more credence to the first interpretation than to the second.]

[This study investigates the measures of pension assets and liabilities disclosed under SFAS 87 to determine which most closely reflect those that investors implicitly assess when they value the firm. Several measures considered to have conceptual merit are disclosed under SFAS 87, but no single method has been deemed most appropriate. The attributes of the three asset and five liability measurement alternatives disclosed and the controversies surrounding the FASB's deliberations on these alternatives are considered in the research design. Because the pension asset and liability issues in SFAS 87 relate to measurement and reflect a variety of unresolved questions, an approach directly comparing measurement error across alternatives is used. The research design utilizes relevance and reliability, two primary accounting choice characteristics advanced by the FASB. These two attributes are operationalized by the variances and levels of differences between alternative measures and the implied investors' assessment. In most prior studies using cross-sectional valuation to address a variety of research questions, a model is posited and then tested by using book values as substitutes for unobservable variables. The measurement error is considered an econometric problem. Although the valuation equation assumed here is also based on unobservable market values, the measurement error is modeled, and the impact of the measurement error covariance structure on the bias in estimated regression coefficients is a fundamental research design feature. In prior research, this covariance structure is often either assumed to be zero (i.e., the error is "white noise") or left unspecified. The model is based on the attributes of historical costs for the differences between market values and book value amounts, including the candidate pension alternatives. With appropriate assumptions, a technique that exploits the implications of measurement errors in cross-sectional regression is used to compare levels of measurement error rather than purge or ignore it. Although several measures of pension assets and liabilities are found to be significant in explaining firm market value, differences among the alternatives are also significant. The fair value of plan assets and the accumulated benefit obligation each exhibit less measurement error than other alternatives for the entire sample. The projected benefit obligation has less measurement error variance for subsamples in which the salary progression rate includes expected inflation and productivity changes. These findings suggest that (1) footnote disclosures are closer to those assessed in market valuations than are the measures recognized in the balance sheet and (2) investors appear to include expectations about future salary progression in assessing pension liabilities, but view the projected benefit obligation measure as noisy.]

Views Icon Views Article contents Figures & tables Video Audio Supplementary Data Share Icon Share Twitter LinkedIn Tools Icon Tools Get Permissions Cite Icon Cite Search Site Citation Mary E. Barth; Annual Editor Report. The Accounting Review 1 November 2020; 95 (6): 1–22. doi: https://doi.org/10.2308/accr-10804 Download citation file: Ris (Zotero) Reference Manager EasyBib Bookends Mendeley Papers EndNote RefWorks BibTex toolbar search Search nav search search input Search input auto suggest Search

editorial| August 12 2020 Annual Editor Report Mary E. Barth Mary E. Barth Stanford University Search for other works by this author on: This Site PubMed Google Scholar The Accounting Review (2019) 94 (6): 1a–21. https://doi.org/10.2308/accr-10749 Views Icon Views Article contents Figures & tables Video Audio Supplementary Data Share Icon Share Facebook Twitter LinkedIn Email Tools Icon Tools Get Permissions Cite Icon Cite Search Site Citation Mary E. Barth; Annual Editor Report. The Accounting Review 1 November 2019; 94 (6): 1a–21. doi: https://doi.org/10.2308/accr-10749 Download citation file: Ris (Zotero) Reference Manager EasyBib Bookends Mendeley Papers EndNote RefWorks BibTex toolbar search Search nav search search input Search input auto suggest Search This content is only available as a PDF. Article PDF first page preview Close Modal You do not currently have access to this content.

My vision is that by 2036 accounting is known as the learned profession that provides information for informed decision-making to support a prosperous society. By 2036, academic and practicing accountants view themselves as part of the same profession, and practicing accountants look to academics to develop knowledge relevant to identifying information—and its characteristics—useful in informing decisions. In sum, insights from research are instrumental in shaping accounting in practice. To achieve this vision, academics need to (1) conduct fundamental and applied research; (2) communicate research insights outside of academia; (3) interact with practicing accountants and others who use accounting information, such as managers, capital providers, regulators, and government officials; and (4) ensure that everyone understands that academic accountants are responsible for the “learned” part of accounting as a learned profession.

manuscripts in process at the beginning of the year, plus new submissions, plus resubmissions).In general, this number has grown along with the increase in submissions.Column (e) of Table 1 reports the number of decision letters issued each year. 2 Commensurate with the increase in new submissions during 2018 reported in column (b) and the modest decrease in resubmissions reported in column (c), column (e) shows that the number of decision letters grew by 5.5% in 2018, from 1,113 to 1,174.Thus, driven by the growth in submissions in recent years, the number of submission letters by TAR editors also is at historically high levels.

This paper identifies challenges and opportunities created by global financial reporting for the education and research activities of U.S. academics. Relating to education, after overviewing the relation between global financial reporting and U.S. GAAP, it offers suggestions for topics to be covered in global financial reporting curricula and clarifies common misunderstandings about the concepts underlying financial reporting. Relating to research, it explains how and why research can provide meaningful input into standard-setting, and identifies questions that can motivate research related to topics on the International Accounting Standards Board’s technical agenda and to the globalization of financial reporting.

Investigates how disclosed fair value of banks' investment securities and fair value securities gains and losses are reflected in share prices compared with historical costs. Fair value accounting debate and investment securities; Estimation equations; Fair value relevance and reliability for valuing banks' equity.

The article investigates the measures of pension assets and liabilities to determine which most closely reflect those that investors assess when they value firms. Several measures considered to have conceptual merit are disclosed under SFAS 87, but no single method has been deemed most appropriate. The attributes of the three asset and five liability measurement alternatives disclosed and the controversies surrounding the Financial Accounting Standards Board (FASB)'s deliberations on these alternatives are considered in the research design. Because the pension asset and liability issues in SFAS 87 relate to measurement and reflect a variety of unresolved questions, an approach directly utilizes relevance and reliability, two primary accounting choice characteristics advanced by the FASB. These two attributes are operationalized by the variances and levels of differences between alternative measures and the implied investors' assessment. In most prior studies using cross-section valuation to address a variety of research questions, a model is posited and then tested by using book values as substitutes for unobservable variables.