The Effect of the Disclosures about Level 3 Fair Values on Cost of Debt Capital

• Main Authors: HSU, XING-FANG, 許馨方
• Other Authors: LIN, YAN-TING
• Format: Others
• Language: zh-TW
• Published: 2019
• Online Access: http://ndltd.ncl.edu.tw/handle/7jt9e9

碩士 === 輔仁大學 === 會計學系碩士班 === 107 === The purpose of this study is to examine the effect of the disclosures about Level 3 fair values on cost of debt capital. Using the yield spread between government bonds and corporate bonds is used to measure the debt capital cost. The disclosures of valuation techniques, quantitative information about the significant unobservable inputs, and the sensitivity analysis of the changes in unobservable inputs of Level 3 fair values are used to measure the disclosure quality of Level 3 fair values. The empirical results show that the disclosures about the quantitative information of unobservable inputs and the sensitivity analysis of the changes in unobservable inputs significantly reduce the cost of debt capital. Moreover, the cost of debt capital of the firms which disclose the three items simultaneously is significantly lower than that of other firms, suggesting that the completeness of the disclosures about Level 3 fair values helps to decrease the cost of debt capital.