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Columbia Business School study says analysts’ concerns about
fair value accounting clouded the already murky waters, fueling the crisis
Widespread finger–pointing in the fallout from the 2008–2009
financial crisis is only exacerbated by the continuing legal battles between
the big banks and SEC. Fair value accounting (FVA) is often cast as the culprit
for accelerating the economic downturn, but a new study from Columbia Business
School, published in the Journal of Accounting and Public Policy, examines
FVA’s role in the financial crisis and considers the advantages it offers
relative to other methods of accounting.