Economic Consequences of Fair Value Reclassifications of Financial Assets According to IAS 39

Inhaltsverzeichnis (Table of Contents)

• Introduction
• Theoretical Framework
  • IAS 39 - Financial Instruments: Recognition and Measurement
  • IAS 39 and IFRS 7 Amendments: The Reclassification Option
  • Bank's Regulatory Capital
  • Reclassification Consequences for Bank's Financial Statements
  • Related Literature
  • Fair Value Hierarchy of Financial Assets
• Data and Statistics
  • Data Sources and Sample Selection
  • Definition of Variables
  • Sample Characteristics and Representativeness
  • Testing the Theoretical Predictions
    • Correlation Tests
    • Causality Tests
      • Theoretical background
      • Logit Model
      • Linear Regression
• Critical Appraisal
• Conclusion
• Appendix
• References

Zielsetzung und Themenschwerpunkte (Objectives and Key Themes)

This master's thesis explores the economic consequences of fair value reclassifications of financial assets during a financial crisis. The study focuses on the impact of the amendment according to IAS 39 on Western European banks. The primary objective is to empirically analyze the effects of this amendment on bank performance and risk.

• The impact of IAS 39 amendments on bank performance
• The relationship between fair value reclassifications and bank risk
• The role of regulatory capital in mitigating the consequences of fair value reclassifications
• The effects of the financial crisis on the application of fair value accounting principles
• The implications of the findings for bank management and regulation

Zusammenfassung der Kapitel (Chapter Summaries)

• Introduction: This chapter provides an overview of the research topic and its significance. It outlines the motivations for the study, the research questions, and the structure of the thesis.
• Theoretical Framework: This chapter presents the theoretical background for the study. It discusses the relevant accounting standards, including IAS 39 and IFRS 7 amendments, and explores the implications of fair value accounting for banks. The chapter also delves into the concept of bank regulatory capital and its role in mitigating risks.
• Data and Statistics: This chapter describes the data sources and sample selection used in the empirical analysis. It defines the variables used in the study, analyzes the sample characteristics, and explains the methodology for testing the theoretical predictions. The chapter covers both correlation and causality tests, including Logit and Linear Regression models.
• Critical Appraisal: This chapter critically appraises the findings of the empirical analysis. It discusses the limitations of the study, considers alternative interpretations of the results, and provides insights into the implications of the findings.

Schlüsselwörter (Keywords)

The primary focus of this thesis revolves around the impact of fair value reclassifications on Western European banks during a financial crisis. Key concepts include IAS 39, IFRS 7 amendments, bank performance, bank risk, regulatory capital, fair value accounting, and empirical analysis. The study utilizes statistical methods such as correlation tests, Logit models, and Linear Regression to investigate the relationship between these factors.