The Relevance of Fair Value Across Countries: Firms Listed in Lisbon and Madrid Stock Exchange

José Veiga (), Joaquim Fernandes (), Cristina Gonçalves () and Georgette Andraz ()
Additional contact information
José Veiga: University of Algarve, Postal: Master student in accounting, ESGHT, University of Algarve, Campus da Penha, 8005-139 Faro, Portugal, http://www.ualg.pt/pt
Joaquim Fernandes: University of Algarve- ESGHT, Postal: Professor of accounting, ESGHT, University of Algarve , Campus da Penha, 8005-139 Faro, Portugal, http://esght.ualg.pt/pt
Cristina Gonçalves: University of Algarve- ESGHT, Postal: Professor of accounting, ESGHT, University of Algarve , Campus da Penha, 8005-139 Faro, Portugal, http://esght.ualg.pt/pt
Georgette Andraz: University of Algarve- ESGHT, Postal: Professor of management, ESGHT, University of Algarve , Campus da Penha, 8005-139 Faro, Portugal, http://esght.ualg.pt/pt

Journal of Tourism, Sustainability and Well-being, 2015, vol. 3, issue 1, 78-95

Abstract: Following the theories of gray and positive accounting this study examines the options in the measurement of assets and the usefulness of fair value. Using a sample of 104 Portuguese and Spanish companies with listed securities, the research analyzes factors associated with the fair value option and whether the listing incorporates this information. The results reveal a conservative behavior, where only 19% of companies use the fair value, specially the Portuguese (35%), confirming that the country of origin has a significant influence on this choice. The fair value option is more expressive on investment properties, and less expressive in intangibles. The sectors denote significantly different behaviors, and companies with higher quotes are more cautious using the fair value. The market reacts differently about the nature of this information. It is favorable to its sectorial utilization, reacting negatively to a more widespread use (Portugal), which supports the argument that the relevance of fair value estimates are dependent on the confidence placed by investors. This study contributes to stress the culture and market price of companies as explanatory variables for the use of fair value. Our findings suggest a more conservative culture in Spanish than in Portuguese companies.

Keywords: Fair Value; Historical Cost; Market Value; Cultural Environment (search for similar items in EconPapers)
JEL-codes: M40 (search for similar items in EconPapers)
Date: 2015
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://www.cieo.pt/journal/J_1_2015/article6.pdf Full text (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ris:jspord:0046

Access Statistics for this article

Journal of Tourism, Sustainability and Well-being is currently edited by Patrícia Pinto

More articles in Journal of Tourism, Sustainability and Well-being from Cinturs - Research Centre for Tourism, Sustainability and Well-being, University of Algarve University of Algarve, Faculty of Economics, Campus de Gambelas, 8005-139 Faro, Portugal, Coordinator of the Centre: Prof. Patrícia Pinto, E-mail: pvalle@ualg.pt. Contact information at EDIRC.
Bibliographic data for series maintained by Silvia Fernandes ().