This article aims to investigate whether fair value hierarchy affects value relevance of Palestinian portfolios, especially level three, due to unobservable inputs use on it. The researchers used regression model (logarithm regression) which mainly includes fair value levels as independent variables, and stocks price, for those companies have portfolios, as adependent variable. The targeted population is the Palestinian financial organizations (14 institutions) that include portfolios under Palestine Exchange (PEX) from period 2011 to 2016 which is the most recent period. The article results showed that the fair value hierarchy significantly affects the relevance and reliability of information presented to the investor's, the mark-to-model fair value assets are significantly priced higher than mark-to-market fair value assets. Finally, level 3 gains do not reduce investors' pricing of Level 3 asset, due to the investor's trust in entities’ information, since it is audited and disclosed in the financial reports in accordance with the requirements of standards.

Title

International Journal of Economics, Commerce and Management

Publisher

Copyright © 2018 — International Journal of Economics, Commerce & Management

Publisher Country

United Kingdom

Publication Type

Online only

Volume

6

Year

2018

Pages

13