| Summary: | 碩士 === 國立臺北大學 === 會計學系 === 107 === Most of the previous studies indicated that fair values provide predictive ability for future performanc. However, fair values enhance the predictive ability of operating performance depends on the relevance and reliability of the fair value information. The U.S. Financial Accounting Standards Board (FASB) issued Statement of Financial Accounting Standards (SFAS) No. 157 Fair Value Measurements, which definites fair value clearly and creates a three-level fair value hierarchy valuing the assets/liabilities based on the observability of inputs. The statement provides this study to investigate the reliability of fair value information and to investigate the predictive ability of the fair value hierarchy for operating performance. This study uses a sample of U.S. bank holding companies from the second quarter of 2008 through the fourth quarter of 2017 and measues net income, comprehensive income, and operating cash flow as as the proxies for operating performance.
The primary results of this study find that fair value information of net financial assets is able to predict a firm’s operating performance. In addition, this study also finds that fair value of the level 1 and level 2 net financial assets is more likely to predict operating performance than that of level 3 net financial assets. Moreover, this study also examines the relationship between the changes in net financial assets of three-level fair value hierarchy and future operating performance and obtains similar results to primary findings. Overall, this study provides the evidence that the higher reliability of fair value information, the more predictive ability for operating performance.
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