Standard setters’ use of qualitative characteristics in fair value standards: a Derridean analysis

Qualitative characteristics (QCs) are accounting concepts stated in standard setters' conceptual frameworks, which are intended to guide their standard-setting decisions. This paper explores how the FASB and IASC/IASB used their primary QCs (relevance, reliability and faithful representation) in their fair value standards. Drawing on Derrida's notion of iterability, we analyse how and why these QCs were reiterated in different contexts to promote, defend and retreat from fair value. Our findings show that QCs are not fixed concepts, but rather evolve through reiteration across different standard-setting contexts. This malleability enables the Boards to justify standard-setting decisions as their preferences evolve. Our research contributes to the literature on conceptual frameworks by identifying the flexible use of QCs in standard setting as a subtle mode of standard setters' legitimacy work, while also showing that these reiterations shape, and sometimes subsequently reverse, revisions of conceptual frameworks. Ultimately, we reveal that neither conceptual frameworks nor standards act as fixed reference points for the meanings of QCs, which are mutually deferred in an endless process of reiteration.