Market Perceptions of Fair Value Reporting for Tangible Assets

Jenelle K. Conaway, Lihong Liang, Edward J. Riedl

Research output: Contribution to journalArticlepeer-review

1 Scopus citations


This article examines equity market perceptions of fair value reporting for tangible assets. We identify six events—four designated as increasing, two as decreasing—affecting the likelihood of U.S. adoption of fair value reporting for investment property (i.e., real estate) assets, one of the largest asset classes in the world. Fair value adoption in the United States would facilitate convergence of one of the widest remaining disparities between U.S. reporting and International Financial Reporting Standards (IFRS): accounting for tangible investment property assets, where the United States (IFRS) requires depreciated historical cost (recognized or disclosed fair values). Using a sample of U.S. investment property firms, we document an average positive market reaction for movement toward fair value reporting. We further find predictable cross-sectional variation, with the market reaction increasing for firms with greater commitment to high-quality reporting, greater investor demand for fair values, higher financial risk, and staler asset values. Overall, the results are consistent with U.S. equity markets perceiving net benefits to movement toward a fair value reporting approach for this asset class.

Original languageEnglish (US)
Pages (from-to)908-933
Number of pages26
JournalJournal of Accounting, Auditing and Finance
Issue number4
StatePublished - Oct 2023


  • convergence
  • event study
  • fair value
  • investment property
  • tangible assets

ASJC Scopus subject areas

  • Accounting
  • Finance
  • Economics, Econometrics and Finance (miscellaneous)


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