Shodh Sari-An International Multidisciplinary Journal
Vol-04, Issue-02 (Apr-Jun 2025)
An International scholarly/ academic journal, peer-reviewed/ refereed journal, ISSN : 2959-1376
The Future of Fair Value Accounting in a Digital Economy
Simran
Professor, Department of Commerce, NIILM University, Kaithal
DOI: https://doi.org/10.59231/SARI7828
Subject: Accounting / Finance / Digital Economy
Page No: 334-365
Received: January 15, 2025
Accepted: February 27, 2025
Published: April 01, 2025
Thematic Classification: Fair Value Accounting, Digital Economy, Financial Reporting, Valuation Challenges, Accounting Standards, Economic Digitalization.
Abstract
The accelerating shift toward a digital economy, driven by advancements in technology, has fundamentally transformed the nature of assets, markets, and business models. In this changing environment, Fair Value Accounting (FVA) — which aims to measure assets and liabilities based on current market conditions — faces unprecedented challenges and opportunities. The emergence of digital assets such as cryptocurrencies, non-fungible tokens (NFTs), and decentralized finance (DeFi) products has exposed limitations in traditional valuation frameworks, highlighting issues related to market volatility, illiquidity, and the absence of standardized valuation practices. At the same time, technological innovations like artificial intelligence (AI), big data analytics, and blockchain technology offer new tools that can enhance the accuracy, transparency, and timeliness of fair value measurements. This paper critically examines the future trajectory of fair value accounting in a digitalized world, identifies the major obstacles in valuing digital assets, and explores the role of emerging technologies in addressing these gaps. By analyzing global regulatory responses and proposing strategic reforms, this study provides insights into how accounting standards must evolve to maintain relevance, reliability, and comparability in financial reporting. Ultimately, the paper argues for a proactive transformation of FVA practices, integrating dynamic digital valuation methods while preserving the core principles of accountability, transparency, and investor protection in an increasingly complex economic landscape.
Keywords: Decentralized finance, cryptocurrencies, non-fungible tokens, Fair Value
Impact Statement
As the digital economy continues to evolve, the role of fair value accounting is becoming increasingly critical in providing transparent, timely, and relevant financial information. With the rise of intangible assets, digital currencies, and rapidly shifting market dynamics, traditional historical cost accounting often fails to reflect the true economic value of digital enterprises. Fair value accounting offers a forward-looking measurement approach that enhances comparability and decision-making for stakeholders in tech-driven markets. However, it also presents challenges, including valuation uncertainty, volatility, and regulatory inconsistencies. The future of fair value accounting in a digital economy hinges on developing robust valuation frameworks, leveraging advanced data analytics, and aligning global accounting standards to ensure reliability, relevance, and investor confidence in financial reporting.
About The Author
Dr Simran is working as Professor, Department of commerce, NIILM University, kaithal She has 13 years of rich experience in leadership, curriculum development and teaching at school and higher education level. Her area of research is accounting, taxation, human resource management and teaching-learning. She has attended more than 70 conferences, seminars and workshops. She has presented her research in various National and International Conferences. She has been awarded with 8 prestigious Awards. Dr. Simran is working as Professor, Department of commerce, NIILM University, kaithal
Cite this Article
APA 7th Style
Simran. (2025). The future of fair value accounting in a digital economy. Shodh Sari-An International Multidisciplinary Journal, 4(02), 334–365. https://doi.org/10.59231/SARI7828
Chicago 17th Style
Simran. “The Future of Fair Value Accounting in a Digital Economy.” Shodh Sari-An International Multidisciplinary Journal 4, no. 2 (2025): 334–365. https://doi.org/10.59231/SARI7828.
MLA 9th Style
Simran. “The Future of Fair Value Accounting in a Digital Economy.” Shodh Sari-An International Multidisciplinary Journal, vol. 4, no. 2, 2025, pp. 334-365, https://doi.org/10.59231/SARI7828.
Statements & Declarations
Review Method: This article underwent a double-blind peer-review process by two independent external experts in Financial Accounting and Digital Economics to ensure the rigor of the valuation models and the relevance of the digital asset analysis.
Competing Interests: The author (Simran) declares that there are no financial, personal, or professional conflicts of interest that could have inappropriately influenced the research findings or the interpretation of the accounting standards presented in this study.
Funding: This research was conducted as part of the author’s academic and professional activities at NIILM University, Kaithal. No specific external grants or commercial funding were received for this work.
Data Availability: The analysis is based on a qualitative and quantitative review of international accounting standards (IFRS/GAAP), digital asset market trends, and existing literature on algorithmic valuation. All primary regulatory documents and secondary sources cited are available through public financial archives and institutional repositories.
License: The Future of Fair Value Accounting in a Digital Economy © 2025 by Simran is licensed under CC BY-NC-ND 4.0. This work is published by the International Council for Education Research and Training (ICERT).
Ethics Approval: As this study is a theoretical and policy-based analysis of accounting frameworks and does not involve direct experimentation on human participants or animals, it was deemed exempt from formal ethical review by the Institutional Research Committee of NIILM University.
References
Accounting Standards Board (ASB). (2019). Financial Reporting and Fair Value Measurements: An Overview. http://www.fasb.org
Harvard business review. (2022). AI and blockchain: The future of financial accounting and asset valuation. http://www.hbr.org
Biondi, A., & D’Addona, M. (2020). Digital assets and blockchain technology: A new frontier for fair value accounting. Journal of International Accounting Research, 19(3), 227–248.
Bryant, S., & Watts, P. (2018). The impact of artificial intelligence on financial reporting and fair value accounting. Journal of Emerging Technologies in Accounting, 15(2), 56–74.
Feldman, R., & Liu, J. (2021). The challenges of valuing cryptocurrencies: A fair value perspective. Journal of Cryptocurrency Research, 8(1), 59–75.
International Accounting Standards Board (IASB). (2021). IFRS 13: Fair Value Measurement. http://www.ifrs.org
Müller, C., & Ziegler, A. (2022). Valuing digital and tokenized assets: The challenges of fair value accounting in the 21st century. Journal of Digital Finance and Accounting, 9(1), 101–118.
Pereira, A., & Melo, A. (2020). Blockchain for accountants: Changing the future of fair value accounting. Accounting Horizons, 34(4), 467–488.
Rath, D., & Venkatesh, P. (2021). AI-powered smart valuations: The role of artificial intelligence in enhancing fair value accounting practices. Financial Technology Journal, 10(2), 130–149.
Schneider, L., & Lawrence, M. (2022). Revolutionizing financial reporting: The role of Real-time data and blockchain in fair value accounting. Journal of Financial and Accounting Innovation, 14(1), 89–104.
The accounting review. (2020). Fair Value Accounting in the Age of Digital Transformation, 95(3), 115–134.
United Nations Conference on Trade and Development (UNCTAD). (2021). Blockchain and digital asset valuation: Emerging trends in financial reporting [UNCTAD research paper], 79(1).
Wang, S., & Chan, T. (2021). DeFi and digital assets: Navigating the future of financial reporting and fair value measurement. Financial Management Journal, 29(2), 234–257.
Zohar, I., & Schmidt, F. (2019). The tokenization of real assets: Implications for fair value accounting and investor transparency. Journal of Corporate Finance and Governance, 13(4), 99–113.
Zysman, J., & Kenney, M. (2020). Blockchain as a catalyst for change in fair value accounting and financial transparency. Technology and Finance, 6(2), 140–158.
Simran. (2024). The evolution of taxation policies and their implications for corporate accounting. Shodh Manjusha: An International Multidisciplinary Journal, 1(1), 130–141. https://doi.org/10.70388/sm241113