Discussion of “The effect of fair value accounting on the performance evaluation role of earnings”

Ivy Xiying Zhang, Yong Zhang

Research output: Journal article publicationJournal articleAcademic research

2 Citations (Scopus)


Using the setting of IFRS adoption, DeFond, Hu, Hung, and Li (2020) examine the impact of fair value accounting on the usefulness of earnings in executive performance evaluation and compensation. In this discussion, we review the research design, discuss the implications of the findings, and provide suggestions for future research. In particular, DeFond et al.’s measure of the impact of fair value accounting may contain substantial measurement error, which calls for additional analyses. We believe that DeFond et al. address an important question motivated by recent developments in accounting standard setting. Yet, the broader question of whether and how IFRS fair value provisions affect the way compensation contracts are written and the usefulness of accounting information, not just that of earnings, has not been fully understood.

Original languageEnglish
Article number101343
JournalJournal of Accounting and Economics
Issue number2-3
Publication statusPublished - 1 Nov 2020


  • Compensation contracting
  • Fair value accounting
  • Usefulness of accounting information

ASJC Scopus subject areas

  • Accounting
  • Finance
  • Economics and Econometrics


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