Impact of factors on fair value accounting: empirical study in Vietnam

Abstract

Due to the ongoing process of globalization, enterprises need to provide financial statements in accordance with international practices, in which information about assets and liabilities should be presented at fair values rather than at original prices. Fair value is supported by the International Accounting Standards Board and the Financial Accounting Standards Board. The purpose of this study is to evaluate the adoption of fair value accounting in Vietnam and the impact of factors on the adoption of fair value. The paper used the analytical framework of previous studies to identify factors affecting the adoption of fair value. Additionally, this study applied quantitative research methods and collected data by sending questionnaires to 127 accountants and directors of listed companies. Particularly, binary logistic regression was conducted to investigate the extent of the impact of each factor on the adoption of fair value. The results have shown that human resources have the strongest and positive impact on the adoption of fair value, and this is followed by the benefits of fair value. Difficulties and markets negatively affect the use of fair value. Furthermore, the control variables that affect the use of fair value are sector, size and length of operation with different levels of impact. The accuracy rate of the overall predictive model is 85.8%. The findings provide guidance of the application of fair value accounting in companies and give recommendations to policy makers in establishing a legal accounting framework in Vietnam.

Keywords

• accounting
• benefits
• difficulties
• fair value
• markets
• measurement