Date of Award
Master of Science (MS)
Economics and Finance
T. Scott Findley
With ongoing controversy concerning fair value and historical cost accounting, existing accounting theory is focused on intra-firm decision making and is thus deficient in addressing the issue of maximizing social welfare. I propose models of historical cost and fair value accounting regimes which are embedded in models of monopoly and oligopoly. This allows for social welfare implications. I find that historical cost results in greater expected profits for both monopolists and oligopolists. However, if the market is elastic enough, a fair value regimes is welfare enhancing. Whereas, if the market is inelastic enough, historical cost is welfare enhancing.
Edholm, Palmer, "A Welfare Comparison of Historical Cost and Fair Value Accounting Regimes" (2022). All Graduate Plan B and other Reports. 1681.
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