Mehrdad Ghanbari, Elham Hayati, Marzieh Taheri, Mahtab Kaki

Abstract

Fair value accounting is considered as a financial reporting approach allowing the companies, when required, to use it to measure and report based on the audit value of certain assets and debts (financial tools) in estimating their values. The question is how fair value accounting influences the quality of financial reporting. If fair value accounting improves the information environment of debtors and facilitates effective reforming, it is expected that the agency contradictions between shareholders and debtors to be reduced. The objective of the current research was to evaluate the impact of fair value accounting on debt structure and financial reporting. The research population included 128 listed companies in Tehran Stock Exchange since 2011 to 2016. Findings revealed that using fair value accounting would reduce the agency cost and debt maturity structure and increase the quality of financial reporting. Thus, using fair value accounting method can increase the transparency of accounting information.