Fair value: Criticisms and challenges from Critical Accounting Perspective

Document Type : Research Paper


1 Accounting, Accounting, University of Tehran, Tehran, Iran.

2 University of Tehran


Fair value: Criticisms and challenges from Critical Accounting Perspective


Objective: In this research, the critiques of fair value have been studied and an interpretation of these achievements has been provided. Opinions about fair value fall into three categories. A group that strongly supports it. A group that strongly opposes it and a group that for some reason have concerns about it. Understanding the reasons for criticisms of fair value requires a better understanding of the concept of fair value, especially from a theoretical perspective and the evolution of this measurement system. Therefore, in a segment of this research, the historical, political and social contexts that have led to the formation of fair value in different parts of the world have been studied.

Method: The present research has been done qualitatively and by meta-synthesis method. In this regard, the steps of arranging research questions, systematically reviewing the literature, searching and selecting appropriate texts, extracting information, analyzing and combining qualitative findings, and presenting interpretations on existing interpretations have been performed.

Findings: In this study, a review, identification, typology, classification and analysis of different areas of research in the field of fair value from a theoretical-critical perspective is presented, which represents eight areas of special interest, including theories used in measurement systems, reasons for the formation of fair value, its relationship with standardization and its uses, the role of the theoretical framework of financial reporting in development of fair value, advantages of fair value, disadvantages of fair value, effect of Fair value on financial crises, auditing challenges of fair value and the effect of capitalist and communist financial systems on fair value.

Conclusion: In this study, critiques and challenges on fair value from a theoretical and critical perspective over the last two decades were identified. This research can be used as a roadmap for researchers in fair value studies, which shows the areas of interest in this regard and the sections that can be studied in the future. During this research a useful solution has been reached. In fact, choosing between historical value and fair value means sacrificing one of the two main purposes of financial statements. Dual measurement system is the solution to this problem. Information provided by both methods provides useful information to investors. Fair value provides information about expected benefits while historical value is useful for monitoring and control.

Key words: Fair Value, Financial Crisis, Fair Value Accounting, Meta synthesis


Main Subjects