Asset Revaluation Regulations

25 Pages Posted: 10 Jan 2009

See all articles by Joel S. Demski

Joel S. Demski

University of Florida - Fisher School of Accounting

Haijin Lin

University of Houston

David E. M. Sappington

University of Florida - Department of Economics; National Bureau of Economic Research (NBER)

Date Written: January 10, 2009

Abstract

GAAP mandates a variety of departures from historical cost valuation. We consider a simple model that produces corresponding variety, depending on prevailing regulatory objectives and economic conditions. The model entails entrepreneurial investment in an asset followed by private information about asset value that cannot be communicated. A lemons problem arises in the asset resale market, creating a role for mandated disclosure in the form of audited asset revaluation.

Keywords: asset revaluation, regulation

JEL Classification: D80, K20

Suggested Citation

Demski, Joel S. and Lin, Haijin and Sappington, David E. M., Asset Revaluation Regulations (January 10, 2009). Available at SSRN: https://ssrn.com/abstract=1325849 or http://dx.doi.org/10.2139/ssrn.1325849

Joel S. Demski

University of Florida - Fisher School of Accounting ( email )

Warrington College of Business
PO Box 117166
Gainesville, FL 32611-7166
United States
352-392-7597 (Phone)
352-378-1079 (Fax)

Haijin Lin (Contact Author)

University of Houston ( email )

390F Melcher Hall
Bauer College of Business
Houston, TX 77204-6021
United States
7137437771 (Phone)

David E. M. Sappington

University of Florida - Department of Economics ( email )

224 Matherly Hall
Gainesville, FL 32611-7140
United States
352-392-3904 (Phone)
352-336-1420 (Fax)

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

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