The Role of Fair Value Accounting in Promoting Government Accountability

A key factor to improve the financial accountability of governments is the existence of a set of generally accepted financial reporting of standards, such as IPSAS issued by the IFAC, which seek to enhance information transparency. This paper examines the capability of fair value accounting to impro...

Full description

Saved in:
Bibliographic Details
Published in:Abacus (Sydney) 2012-09, Vol.48 (3), p.348-386
Main Authors: Rodríguez Bolívar, Manuel Pedro, Navarro Galera, Andrés
Format: Article
Language:English
Subjects:
Accountability
Accounting standards
Assets
Estimation
Fair value
Financial accountability
Financial reporting
Government
Government accounting
Governmental accounting
Information exchange
International Public Sector Accounting Standards (IPSAS)
IPSAS
Studies
Transparency
Citations: Items that this one cites
Items that cite this one
Online Access:Get full text
Tags: Add Tag
No Tags, Be the first to tag this record!
Description
Summary:A key factor to improve the financial accountability of governments is the existence of a set of generally accepted financial reporting of standards, such as IPSAS issued by the IFAC, which seek to enhance information transparency. This paper examines the capability of fair value accounting to improve, through financial transparency, government accountability, analysing the possible effect of the implementation of this measurement basis on understandability, comparability and timeliness—three qualitative characteristics linked to the relevance of financial reporting. This paper further considers whether the difficulties involved in achieving FV estimations could affect government financial accountability. The findings indicate that FVA implementation could enhance accountability by improving understandability, comparability and timeliness in governmental financial reporting, although the use of objective measures to estimate the FV of assets is fundamental. In addition, the type of assets and the existence of an active market are crucial to improving the comparability of financial statements under FVA, whereas improving timeliness could be limited by the possibility of estimating FV measures in‐house.
ISSN:0001-3072
1467-6281
DOI:10.1111/j.1467-6281.2011.00352.x