EARNINGS AND FAIR VALUE ACCOUNTING

Abstract

Fair value measurements are on the Romanian Commercial Bank earnings at June 30, 2019. We focus on the relationship between fair value measurements and predictability as a measure of earnings quality. The data collected are from the Romanian Commercial Bank annual reports at June 30, 2019. The persistence, predictability, accruals quality, earnings smoothing and value relevance are the most important measures of earnings quality. Earnings quality and the quality of accounting information are in direct relation. The usefulness of fair value information is explored directly by inspecting its predictive power with respect to future cash flows and future earnings.

Keywords

• earnings quality
• earnings predictability
• commercial bank
• fair value accounting
• financial statements
• historical cost