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THE VALUE RELEVANCE OF FAIR VALUE ACCOUNTING: EVIDENCE FROM THE REAL ESTATE INDUSTRY
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Mukesh Garg 
, Dean Hanlon
Abstract
This study examines whether investors use the fair value of real estate investments in the balance sheet, and unrealized fair value gains and losses in the income statement, in their price setting process. Drawing on sample firms from the real estate development industry in New Zealand, the results of the current study suggest that: (1) unrealized fair value gains and losses on real estate investments have incremental value relevance compared to historical cost earnings, controlling for the method of recognition of the fair value gain or loss; and (2) current fair value of real estate investments has incremental value over historical book value of real estate investments. Such investigation is important given the current international debate concerning fair value accounting.
Keywords: Workplace Flexibility, Stress Reduction, Administrative Employees, Organizational Performance, Biographical Factors
How to cite this paper: Garg, M. & Hanlon, D. (2012). The value relevance of fair value accounting: Evidence from the real estate industry. Corporate Ownership & Control, 9(4-4), 408-417. https://doi.org/10.22495/cocv9i4c4art4
