Macro Impediments of Implementing Fair Value Accounting in Iran’s Banking Industry

The objective of this study is to scrutinize macro impediments of implementing fair value accounting (FVA) in Iran’s banking industry. Fair value is an inseparable part of international financial reporting standards (IFRS). Global experiences show that with nature of banking business and large portion of financial instruments, it would be much more difficult to implement FVA in banking sector. Also it seems that the characteristics of Iran’s economic environment in conjunction with Reba-free banking rules adds more to the complexity of transition to a fair value basis. This clearly indicates the importance of evaluating different aspects of implementing FVA and identifying its impediments. This study used a survey to obtain expert viewpoints (109 sent questionnaire with 90% rate of return). To analyze the data we use fuzzy logic and TOPSIS method.  Findings show that, characteristics of Iran’s economic environment, inefficiency of markets and inadequacy of professional judgment are substantial macro impediments. Moreover, enhancing supervisory mechanisms, developing a specialized valuation body and using valuation standards are necessities of implementing fair value accounting in Iran’s banking industry and Compliance with ifrs requirements. Given that the effects of applying fair value in the banking industry will be widespread, the move toward fair value must be made with the utmost care, caution and timeliness.