Fair value measurement revolutionizes accounting standards and financial markets worldwide.
The article reviews the development of fair value measurement since the 1990s and discusses future research directions. It covers the history of fair value, important accounting standards, and factors affecting value relevance. Some scholars question whether fair value goes against accounting conservatism and if it leads to more volatile bank earnings compared to historical cost. The financial crisis of 2009 raised concerns about fair value's impact on financial markets.