financial crisis showed signs of abatement and the financial market conditions improved, making the use of Level 3 inputs less critical. To test the hypotheses Ha1 to Ha4, the paired-difference tests were used. First, the datasets for each fiscal year were sorted by CUSIP number, and then merged by CUSIP into one dataset. This dataset consisted of records for each company containing all the fair values disclosed in the annual reports during the period 2007-2010. Several and variables company’s ‘Before’ ‘After’ were created in the following manner: information derived from annual reports issued by companies between November 30, 2007 and June 15, 2009 fell into while ‘Before’ category information derived from reports issued after June 15, 2009 fell into an category. ‘After’ Paired observations were tested using both, parametric paired-difference t-test and Wilcoxon Signed Rank Test. Although each pair of measurements is independent of other pairs, the differences appear not to be from a normal distribution. Therefore outcomes from the Wilcoxon Signed Rank test are more reliable. Table 2 contains descriptive statistics for four and categories: FVA, Level ‘Before’ ‘After’ 3_Assets, FVL, and Level 3_Liabilities. Mean Differences between and ‘Before’ ‘After’ variables are also reported as well as the paired-difference tests results. The goal of this analysis is to determine whether the average change from to is larger than could happen ‘Before’ ‘After’ by chance alone. {TABLE 2 ABOUT HERE} There were 1,301 paired differences available to test hypotheses Ha1 and Ha2, and 818 paired differences to test hypotheses Ha3 and Ha4. The results are statistically significant and provide
financial crisis showed signs of abatement and the financial market conditions improved, making the use of Level 3 inputs less critical. To test the hypotheses Ha1 to Ha4, the paired-difference tests were used. First, the datasets for each fiscal year were sorted by CUSIP number, and then merged by CUSIP into one dataset. This dataset consisted of records for each company containing all the fair values disclosed in the company’s annual reports during the period 2007-2010. Several ‘Before’ and ‘After’ variables were created in the following manner: information derived from annual reports issued by companies between November 30, 2007 and June 15, 2009 fell into ‘Before’ category while information derived from reports issued after June 15, 2009 fell into an ‘After’ category. Paired observations were tested using both, parametric paired-difference t-test and Wilcoxon Signed Rank Test. Although each pair of measurements is independent of other pairs, the differences appear not to be from a normal distribution. Therefore outcomes from the Wilcoxon Signed Rank test are more reliable. Table 2 contains descriptive statistics for four ‘Before’ and ‘After’ categories: FVA, Level 3_Assets, FVL, and Level 3_Liabilities. Mean Differences between ‘Before’ and ‘After’ variables are also reported as well as the paired-difference tests results. The goal of this analysis is to determine whether the average change from ‘Before’ to ‘After’ is larger than could happen by chance alone. {TABLE 2 ABOUT HERE} There were 1,301 paired differences available to test hypotheses Ha1 and Ha2, and 818 paired differences to test hypotheses Ha3 and Ha4. The results are statistically significant and provide