THE RELEVANCE AND RELIANCE OF FAIR VALUE ACCOUNTING INFORMATION- EVIDENCE FROM CAPITAL AND DEBT MARKET INSTITUTIONS IN JORDAN

Abstract

The study's primary goal was to evaluate the fair value accounting method's applicability and usefulness using capital market data. The study also focused on identifying flaws in the application of how they use the fair value accounting approach to affect its applicability and usefulness as a tool for decision-making. A fixed effect regression model was estimated using secondary data from composites 4 debt market firms and 5 capital market firm’s enterprises over the years 2009 to 2018. Using the redundant fixed effects test as a basis, the fixed effect regression model was mentioned as being deemed suitable for the goals of this investigation. The established results demonstrated a positive correlation between the capital and debt institutions' stock prices and level 1 fair value assets, company size, and net income. Fair value liabilities and Level 2 fair value assets were shown to be adversely correlated related to the capital and loan institutions' stock prices. To keep a positive investor attitude toward the company, solid ethical principles, combined with appropriate disclosure and fairness in the financial statement compilation, are required. This is so that a company's stock will continue to be in high demand, which depends on sustaining positive investor relationships and attitudes.