Fair Value Measurement, Accounting Choice, and Financial Reporting Comparability: A Systematic Literature Review of Evidence, Theoretical Perspectives, and Emerging Research Directions
DOI:
https://doi.org/10.70142/jbl.v3i1.73Keywords:
Fair Value Measurement, Accounting Choice, Financial Reporting Comparability, Accounting Mismatch, Managerial DiscretionAbstract
This study examines the relationship between fair value measurement, accounting choice, and financial reporting comparability through a qualitative systematic literature review. Drawing on relevant accounting literature, the study synthesizes empirical evidence and theoretical perspectives to identify key mechanisms, boundary conditions, and emerging research directions. The findings indicate that fair value measurement and accounting choice do not have uniformly positive or negative effects on comparability. Instead, their effects depend on the extent to which measurement choices improve economic representation and reduce accounting mismatches. Comparability is enhanced when fair value estimates rely on observable information, accounting choices reflect underlying economic relationships, and effective investor monitoring and institutional enforcement are present. Conversely, measurement uncertainty, Level 3 valuations, managerial discretion, and opportunistic incentives may reduce comparability. The study contributes an integrated framework explaining how measurement choice, accounting mismatch, managerial incentives, measurement observability, and institutional factors jointly shape financial reporting comparability.
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