| Summary: | 碩士 === 國立臺灣大學 === 會計學研究所 === 97 === Using S&P500 companies as a sample, this paper investigates the effectiveness of fair value option in reducing information asymmetry. In February 2007, FASB announced statement 159, ’’ The Fair Value Option for Financial Assets and Liabilities ‘’ (SFAS No.159). This statement provides companies the option to measure financial assets and liabilities by fair value (i.e. Fair Value Option). The FASB believes that the adoption of SFAS No.159 would benefit from mitigating volatility in reported earnings caused by accounting mismatch. Moreover, resulting from hedge accounting simplification and more disclosure requirements, lower forecast dispersion is expected. Therefore, the hypothesis of whether adopting fair value option is negatively related to information asymmetry is tested. Results of the study are inconsistent with the hypotheses. This empirical result could come to the explanation that the U.S. subprime mortgage crisis and the following financial crisis might affect the data period of FVO due to this special period. Hence, the empirical results of this study do not support the hypotheses that adopting the FVO leads to decreased information asymmetry.
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