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Role and Measurement of Fair Valuation in the Hungarian Credit Institution Sector

Author

Listed:
  • Tamás Szücs

    (University of Pécs)

  • József Ulbert

    (University of Pécs)

Abstract

The crisis demonstrated that the role of the accounting standards applicable to fair valuation may be particularly important in the credit institution sector. The paper examines the influence exerted on the balance sheets of the Hungarian credit institutions by the fair valuation and the international and the Hungarian economic policy regulatory changes relating to valuation. We place special emphasis on examining whether the foreign-owned credit institution subsidiaries operating in Hungary and their parent banks responded differently to the challenges posed by the crisis. We elaborated a method for the measurement of the real involvement and using this we examine how the fair value involvement of the Hungarian credit institution sector has changed before, during and after the crisis. Generalising the problem, we found that the degree of the fair value involvement may represent an additional risk factor upon assessing the credit institutions’ operational efficiency and that the Hungarian subsidiaries followed a slightly different path than their parent banks.

Suggested Citation

  • Tamás Szücs & József Ulbert, 2017. "Role and Measurement of Fair Valuation in the Hungarian Credit Institution Sector," Financial and Economic Review, Magyar Nemzeti Bank (Central Bank of Hungary), vol. 16(3), pages 51-73.
    • Handle: RePEc:mnb:finrev:v:16:y:2017:i:3:p:51-73
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    References listed on IDEAS

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    Cited by:

    1. Cziglerné Erb, Edina, 2020. "The Re-emergence of the Residual Income Model in the Valuation of Firms and Investment Projects," Public Finance Quarterly, Corvinus University of Budapest, vol. 65(3), pages 430-442.
    2. Attila Háda, 2019. "Banking Supervisors Tracing the Transition to IFRS 9," Financial and Economic Review, Magyar Nemzeti Bank (Central Bank of Hungary), vol. 18(4), pages 77-111.

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    More about this item

    Keywords

    crisis; fair value accounting; fair value hierarchy;
    All these keywords.

    JEL classification:

    • G01 - Financial Economics - - General - - - Financial Crises
    • M40 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - General
    • M41 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - Accounting

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