Study On Fair Value Incremental Information Content After The Implementation Of The New Standards

Since the 21st century, the rapid development of the world economy and especially the rapid development of financial industries promote the traditional accounting measurement model to change substantially, the use of the fair value is a qualitative leap to the whole world. In our country, the similar change also occurred. On February 15th of 2006, China's ministry of finance issued the new system of accounting standards which include 1 basic standard and 38 specific standards, and regulated that first carrying out in listed companies on January 1 st of 2007. One highlight of the new accounting standards is the basic standard attributing the fair value as one of the five accounting measurements, and there are 17 specific standards involve the fair value measurement in different degrees. Therefore, the use of fair value in accounting recognition and measurement leads us to make research on it.Foreign normative researches basically believe that fair value superior to the historical cost. Most foreign empirical researches consider that the fair value information has value relevance, especially when using the market transaction price as the foundation of the fair value, it has more value relevance. The majority of domestic academic researches for fair value are normative researches, most of them think that the fair value measurement is superior to the historical cost and has more value relevance. At the same time, they are in optimistic attitude to the application of fair value in our country. After the new standards promulgated and implemented, China also sprung up many empirical researches of value relevance for fair value, but the conclusions of our scholars still inconsistent. We believe that in the wake of enriching the large number of data and gradual understanding of the fair value measurement, fair value measurement will be increasingly shows its value relevance under the objective of decision usefulness.Therefore, this paper uses the incremental information content method. According to the "'Fair value flexible loss and profit" item in profit statement and the "Fair value flexible net amount to financial assets available for sale" item in statement of change in stockholder equity, we raise three hypotheses, in the basic of Ohlson model, we build three models to test the three hypotheses we raise and analyze our empirical results. Then, we draw our conclusion and propose some related institutional constructions. Our research results show that after implementing the new accounting standards, the fair value measurement information disclosed in the financial reports of China's listed companies has incremental information content. These results can not only effectively eliminate people's anxiety to the zigzag utilization of fair value in our country, but also provide support in the view of empirical research to the standards' constitutors. So the results of this paper can impel the widespread application in some extent.