Fair value accounting boosts stock prices during financial crises.
This study looked at whether fair value accounting information is still important during a financial crisis. They studied data from 497 companies in Taiwan from 2000 to 2008. The results showed that fair value accounting information is more useful than historical cost information for determining stock prices. When there is a financial crisis, the importance of fair value accounting information changes. Overall, fair value accounting helps make accounting information more relevant, especially if assets and liabilities are valued accurately.