Does Fair value matter for lenders? A discussion for the case of Italy

Fair value measures in financial reporting have been at the centre of the debate in the last years and many scholars consider this kind of evaluation the more relevant and useful. The paper discuss if these conditions recur also in those countries, like Italy, wherein lenders are the major source of financing and hence are the ???primary users??? of financial reporting. Specifically, we argue that fair valuation ??? while potentially useful in countries that boast advanced capital markets with diffused equity ownership ??? is not as useful, and even potentially misleading, in these countries. The discussion about fair valuation grounds on a literature review on the prediction of default, bankruptcy, credit-rating, and the pricing of credit. In this literature the informational inputs used for predictions and pricing of such events largely ignore fair values, whether measured as exit values or otherwise. Basically, the idea that fair values are suitable for all countries and entities, regardless of differences in ownership structure and modes of financing, may need to be re-examined. Possibly, enhanced disclosures of fair values are more likely to satisfy the criterion of decision usefulness in those countries where lenders are the main source of financing.