Bank Accounting and Bank Value: Harmonising (d)effects of a common accounting culture?

Ioannis Anagnostopoulos, Roger Buckland

Research output: Contribution to journalArticle

1 Citation (Scopus)

Abstract

Purpose – This paper aims to draw on the potential behavioural implications of the new (economic) measurement attributes initiated recently by the International Accounting Standard Board (IASB) in their efforts to reflect more relevant, “true” underlying economic values as opposed to historical.

Design/methodology/approach – Owing to lack of readily observable market prices (market values) for loans (retail and commercial operations) for statistical testing and initial conservatism on the part of banks for a survey to be conducted, 15 interviews were employed (from October 2005 to November 2006) with major bankers (CEOs and CFOs of major banks) and standard setters. The paper analyses the perceived benefits and costs associated with the application of two diametrically opposite measurement methodologies for banks. These can also have important implications for the “perceived” value/measurement profile of a bank – as argued in the concluding section – for bankers and their regulators, on the one hand, and accounting standard setters and investors, on the other.

Findings – The propositions constitute a significant departure from current accounting practices in that all financial assets and liabilities should uniformly be recognised and reported under a universally accepted “economistic” measurement framework.

Originality/value – The paper captures perceptions and attitudes as to the future “behavioural” direction of banks and provides a balanced argument between the rigours of historical cost accounting and fair value accounting.
Original languageEnglish
Pages (from-to)360-380
Number of pages21
JournalJournal of Financial Regulation and Compliance
Volume15
Issue number4
DOIs
Publication statusPublished - 2007

Fingerprint

Bankers
Perceived value
Accounting practices
Economics
Liability
Economic value
Accounting standards
Investors
Methodology
Market value
Design methodology
Costs
Historical cost
Conservatism
Financial assets
Perceived benefits
Retail
Cost accounting
Statistical testing
Loans

Cite this

Bank Accounting and Bank Value : Harmonising (d)effects of a common accounting culture? / Anagnostopoulos, Ioannis; Buckland, Roger.

In: Journal of Financial Regulation and Compliance, Vol. 15, No. 4, 2007, p. 360-380.

Research output: Contribution to journalArticle

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