Financial Statement Valuations in the Italian Civil Code: Is Fair Value Really So Extraneous to the Historical Cost Tradition?

The adequacy of the fair value with respect to the historical cost is particularly debated in the literature. This study aims to analyze the Italian legislation on the financial statements in order to verify whether the historical cost is so far from current values. The method applied by this study is based on the historical analysis, from 1942 to today, of the provisions of the Italian civil code on financial statements. The study found that, although the historical cost criterion has always been and still is fundamental, the application of fair value is by no means extraneous to Italian accounting tradition.