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American Accounting Association’s Financial Accounting Standards Committee (AAA) (1996) Response to the FASB Exposure Draft, “Proposed Statement of Financial Accounting Standards—Accounting for Transfers and Servicing of Financial Assets and Extinguishment of Liabilities”. Accounting Horizons, 10, 178-181.

has been cited by the following article:

• TITLE: Fair Value and Volatility in the Cases of Assets Securitization, Derivative Hedging and Loan Loss Provisioning

  AUTHORS: Lan Sun

  KEYWORDS: Fair Value, Volatility, Assets Securitization, Derivative Hedging, Loan Loss Provisioning

  JOURNAL NAME: Theoretical Economics Letters, Vol.5 No.5, October 27, 2015

  ABSTRACT: The concept of fair value is a key element in the international accounting standards and its implementation poses serious concerns in terms of financial stability. There are a number of issues which are particularly important for financial stability that are evidenced in the GFC and have been received much attention in the reform of fair value regime, namely assets securitization, derivatives hedging and loan loss provisioning. This study analyzes and shows the way in which financial reporting for fair values could create volatility through the processes of assets securitization, derivative hedging and loan loss provisioning. The other objectives of financial reporting, namely reliability and comparability, are achievable only if the measures of fair value are reliable and relevant. Fair value measurement is supported on the ground that it provides information which is more relevant to the economic substance and presumably such information will be more useful to investors. Nonetheless, changes in the market landscape and financial innovation are evident and accounting standards so far have not kept pace with the development of financial market which is revealed in this study by analyzing the transactions of assets securitization, derivative hedging and loan loss provisioning.