Assessing the Impact of Alternative Fair Value Measures on the Efficiency of Project Selection and Continuation
研究不同公允价值计量方法如何影响债务契约抑制低效投资决策的能力，发现基于保守公允价值与历史成本的契约表现最佳，而FASB推崇的“最高最佳使用”计量在阻止劣质项目选择上效果不佳。
ABSTRACT We examine how alternative accounting measures of fair value impact the ability of debt covenants to mitigate inefficient investment decisions. In our setting, shareholders make a non-contractible project choice after signing a debt contract. At a later date, the project can be abandoned and new information determines whether shareholders or creditors make that decision. The value of debt covenants depends on their ability to deter costly asset substitution while also mitigating inefficient continuation decisions. A covenant based on a conservative fair value measure tends to perform best in this respect. Departing from purely fair-value-based covenants, an even more conservative covenant based on fair values and historical cost outperforms those based solely on fair values. Notably, the “highest and best use” measure advocated by the FASB performs poorly in deterring the choice of inferior projects. Our results provide a setting in which the contracting efficiencies associated with different accounting measures cannot be replicated across measures by altering covenant “triggers.”