The Value‐relevance of Fair Value Measurement for Inventories

Abstract The objective of this paper is to determine if fair value measurement for inventories value‐relevant. Inventories are measured at historical cost and investors will have estimate the themselves. For a sample firms listed in UK reporting from 2009 2018, multivariate regression results show that component on balance sheet value‐relevant, but not. By contrast, both earnings changes Results therefore imply need movements make decisions. extension, measurements complement, rather than replace, information.