MicroLevel Barriers to Using Fair Value in Financial Reporting of Iranian Banks

Changing the measurement basis from historical to fair value is one of the most important developments in IFRS. The wide dimensions of fair value measurement in the banking industry, requires carefull examination of the obstacles and effects of using this basis before implementation. in addition to the characteristics of the macroeconomic environment, the different banking business framework and structural problems of the banking system; the requirements of riba-free banking law, creates more challenges to comply with fair value measurement requirements in IFRS . the aim of this study is identifying barriers to applying the fair value basis in the Iranian banking industry.after systematic review and interviews, a questionnaire was designed to extract the views of experts and financial reporting staff of banks, about challenges ahead. In this regard, the data obtained from 106 questionnaires were analyzed using fuzzy analysis and TOPSIS ranking. The results indicate that weakness in the executive mechanisms, infrastructure and information systems, the quality of corporate governance and the incompatibility of Iranian banking business with market-oriented economic logic (paradigm governing IFRS) are the most important challenges in applying fair value in the iranian banking industry.