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Information Asymmetry and Fair Value Accounting: Insights from Residential Real Estate in the UK, Germany, and Spain Cover

Information Asymmetry and Fair Value Accounting: Insights from Residential Real Estate in the UK, Germany, and Spain

Open Access
|Dec 2025

Abstract

This study investigates the impact of international accounting and valuation standards (IFRS 13, IVS 2020, IVS 2022, RICS 2022, IPSM 2023) on information asymmetry in the residential real estate markets of the UK, Germany, and Spain. Given the frequent use of subjective inputs in fair value measurements, this sector is particularly susceptible to higher levels of information asymmetry, making it an apt context for analysis. The research analyses changes in selected standards and includes control variables such as company size and market capitalization, using two indicators over the period 2019–2023. Revisions to IFRS 13, IVS 2022, RICS 2022, and IPSM 2023 significantly reduced valuation variability (as measured by the VCVT indicator), confirming their positive effect on market transparency. In contrast, the IVS 2020 update was associated with an increase in the bid–ask spread, suggesting a rise in perceived uncertainty. By jointly examining the bid–ask spread and VCVT, the study provides a comprehensive assessment of how accounting and valuation standards influence liquidity and information asymmetry in the residential property sector - a field that has received limited attention in prior literature. The findings are consistent with earlier research indicating that reduced disclosure requirements can enhance stock market liquidity. Practical implications include recommendations for stricter guidance on Level 3 fair value models and the adoption of best practices from EPRA and REIT frameworks to enhance transparency and credibility in capital markets.

Language: English
Submitted on: Sep 27, 2025
Accepted on: Dec 6, 2025
Published on: Dec 9, 2025
Published by: Real Estate Management and Valuation
In partnership with: Paradigm Publishing Services
Publication frequency: 4 issues per year

© 2025 Jana Nemcova, Patrik Svoboda, David Hampel, published by Real Estate Management and Valuation
This work is licensed under the Creative Commons Attribution 4.0 License.

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