Study On The Application Of Fair Value In The New Accounting Standards

With the dramatic development of knowledge economy and information society, the book value of accounting entity's economic resource bases on the historical cost deviate its market value seriously, which misleads the decision of policy-makers. At this background, the fair value came to birth.In the past decades the fair value question has always been one of the most challenging ones in the international accounting world. Now the discussion about this question has been extended to how to improve the fair value, not be limited to which one is better between the fair value and historical cost. The research about the fair value didn't start until in 90s of 20th century in China, and was first applied in the debt recombination and non-monetary transaction criteria in 1998. But due to the immaturity of production element market, with the application of the fair value, it has come to utilize the fair value to control profit by companies. So there was no choice but stop the utilization of it, but the research of it has been insisted on in China. On February 15th, 2006, the new accounting standards have been promulgated, the most obvious characteristic of which was the reutilization of the fair value, whose range was magnified compared with that in 1998. On such background, this paper aims to study the influence of the utilization of the fair value in the new accounting standards in order to offer some references to its better application in the future.The author analyzed the adoption of fair value in the international community and draw some inspiration.The application of fair value due to the development of economic, we should face actively for the imperfections of accounting standards and the emergence of new problems. The use of fair value is an irreversible trend. At the same time,the paper analysed and evaluated the application of fair value in China combined with the cases of listed companies,and give suggestiongs from the sides of measurement methods, auditing systems and improving on the financial reporting. At first, this paper introduced the background and significance of the topic,carrying on an overview to domestic and international relevant reasearch on fair value.Then the paper introduced the basic theory and relevant content of fair value.After,the article described the application of fair value in accounting standards of foreign countries.It generalized the using of fair value in IAS and FAS.Then,the paper described applications of fair value in new accounting standards of China.Reviewed three phrases of fair value applications briefly in China, on the basis of this, it gave analysis and evaluation of new accounting standards on the application of fair value.Finally,the article brought forward some suggestions about how to apply fair value reasonably in China.