The Relevance of Fair Value Accounting for Credit granting decisions in Kuwaiti Commercial Banks

الجسار, عايض (2014) The Relevance of Fair Value Accounting for Credit granting decisions in Kuwaiti Commercial Banks. Masters thesis, جامعة الشرق الاوسط.

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Abstract

This study aimed to demonstrate the appropriateness of fair value accounting for granting credit decisions in Kuwaiti commercial banks, identify the contribution of fair value accounting in making financial information appropriate with decision makers of granting credit in Kuwaiti commercial banks, and identify obstacles facing decision makers of granting credit in Kuwaiti commercial banks when analyzing the financial items that have been measured in accordance with the fair value accounting for the companies which request credit. To achieve the objectives of the study, the researcher has organized a specialist questionnaire, and distributed it in a community of the study that is Kuwaiti commercial banks; where the, accountants, and internal auditors, and the total number of distributed questionnaires was (125) questionnaires. Note that the number of recovered questionnaires amounted to (100) as the researcher has used the analytical descriptive approach. This study has reached the following findings: that is the trends of the sample was positive toward the paragraphs of the contribution of fair value + accounting in making financial information appropriate with decision makers of granting credit in Kuwaiti commercial banks, and the overall average of (3.8) reflects the high level of support organizers of the credit facilities departments of Kuwaiti commercial banks to apply fair value accounting. As it turns out that the financial statements that reflect the fair value are more understandable by credit facilities sections. Fair value accounting contributes significantly in making financial information more able to rationalize your decision of granting credit in judgment the current and former events. In the light of these findings, the researcher recommended a set of recommendations, that the most important being: the legislator and organizer bodies of the accounting profession in Kuwait carry the responsibilities regarding to set the disclosures required to remove the ambiguity and obscurity in practical application of financial reporting standards; through holding training courses which help to understand the mechanisms of the application of the fair value standards. The researcher recommends to rehabilitate those in charge of credit facilities sections in the banks with a related professional certificates, as it increases the employee awareness and expertise in the standards of fair value accounting, and study the various problems that hinder the use of the concepts of fair value standards by standards experts and try to put appropriate solutions to address these problems.

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