Abstract

VEGA CASTRO, Blanca Iris  and  GONZALEZ CERRUD, Pedro. Professional judgment in selecting the hierarchy of fair value in Latin American companies. Contad. Adm [online]. 2016, vol.61, n.3, pp.441-455. ISSN 0186-1042.  https://doi.org/10.1016/j.cya.2016.04.001.

The application of fair value in financial reporting of companies involves the use of professional judgment. In this study the factors that influence the selection of the level of fair value hierarchy are analyzed. The primary objective of this research is to examine whether the selection of the hierarchy level is related to the contractual efficiency, with reduced information asymmetry, or the possibility of opportunistic behavior by management. A logistic regression was used to examine the hypotheses to information of forty Latin American companies located in Argentina, Brazil, Chile, Colombia, Mexico and Peru. The results show that the greater the size of the company, the greater the likelihood that management would select the level 3 of the hierarchy and management of Latin American companies does not seem to engage in opportunistic disclosure of reducing earning volatility that provides level 3.

Keywords : Accounting standards; Fair value; Professional judgment.

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