Problematising the decision-usefulness of fair values: empirical evidence from UK financial analysts

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In its recently revised conceptual framework, the IASB re-affirms decision- usefulness as the objective of financial reporting, disregarding claims about its lack of coherence. In this paper, we examine how this notion of decision-usefulness works in practice by focusing on the case of fair value measurement. In particular, we explore how decision-usefulness is perceived and experienced by financial analysts when using fair values in their work. We use the frame of ‘problematisation’, which involves challenging assumptions in existing literature, to formulate our research question and to interpret our findings. Empirical evidence, drawn from interviews with UK financial analysts and comment letters analysts wrote to the IASB, puts into question three key assumptions inherent in the revised conceptual framework. First, fair values are not considered to be unquestionably useful to decision-making; second, this usefulness is found to be contingent on the context of the decision being made; and third, the qualitative characteristics required to achieve decision-usefulness are challenged for their lack of meaning. Analysts’ testimonies also challenge taken-for-granted assumptions implicit in academic studies. Assumptions that the decision-usefulness of fair values can be established prior to practice are re-evaluated. We also reflect on the premise that the decision-usefulness of fair values can be challenged on its underlying market-based economic rationales. Overall, our findings contribute to thinking problematically about decision-usefulness which appears to be contingent rather than given by some predetermined ideals as envisaged in accounting conceptual frameworks.
Original languageEnglish
Pages (from-to)307-346
Number of pages40
JournalAccounting and Business Research
Issue number4
Early online date10 Feb 2021
Publication statusPublished - 7 Jun 2021

Bibliographical note

Funding Information:
We would like to thank Bertrand Malsch, two anonymous reviewers, Christine Helliar, Chris Humphrey, Michael Jones, and Roland K?nigsgruber for their helpful comments and suggestions on earlier drafts of the paper. We also acknowledge the comments from conference participants at the 2018 BAFA Conference (London), the 2019 Alternative Accounts Conference (Kingston, Ontario), the 2019 European Accounting Congress (Paphos), and the 2019 Workshop on the Politics of Accounting (Manchester).

Publisher Copyright:
© 2021 Informa UK Limited, trading as Taylor & Francis Group.


  • IFRS
  • conceptual framework
  • decision-usefulness
  • fair values
  • problematisation
  • standard-setting

ASJC Scopus subject areas

  • Accounting


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