How fair value is both market-based and entity-specific: The irreducibility of value constellations to market prices

Hayoun, Shaul,(2019), How fair value is both market-based and entity-specific: The irreducibility of value constellations to market prices. , Accounting, Organizations and Society, UNSPECIFIED

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The objective of this paper is to problematise the fundamental assumption, shared by standard-setters and extant literature, and one that is taken-for-granted in the recent debate on accounting financialisation, that “fair value is a market-based measurement, not an entity-specific measurement” (IFRS 13.2). The paper shows how it is both. This is done by stepping outside the conventional disciplinary resources of accounting e economics and finance e and mobilising an alternative value framework: Ferdinand de Saussure's semiology. Semiology's value is a two-dimensional constellation, i.e. a relational product of other values in the system (the market) and in the statement (the firm). With this framework, the paper analyses measurement practices prescribed by IASB's guidance to explicate its underlying implicit concepts as distinct from those formally proclaimed in IASB's recent Conceptual Framework Exposure Draft (CFED). Such analysis leads to two main insights. First, the entity-specific perspective is reframed as sensitivity to interrelations between value-bearers in the statement, thus avoiding the frequently assumed though contestable dichotomy between present objective facts (market) and subjective estimation of the future (entity-specific). Second, fair value measurement is shown to incorporate e in a manner that is inherent to the standard-setter's own perspective and not merely as a matter of imperfect implementation e both market-based and entity-specific dimensions. IASB's measurement practices are more in line with semiology's framework of two complementary inputs (the market and the entity), than with the CFED's two dichotomous outputs (fair value or value-in-use), and the market/entity contrast is thus conceptually fractured
Keywords : Entity-specific measurement Fair value Financialisation Market paradigm Semiology Value constellation, UNSPECIFIED
Journal or Publication Title: Accounting, Organizations and Society
Volume: 73
Item Type: Article
Subjects: Akuntansi
Depositing User: Users 8 not found.
Date Deposited: 27 Dec 2019 08:13
Last Modified: 27 Dec 2019 08:13

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