Research On The Impact Of Fair Value Accounting On Chinese Listed Commercial Banks

Nowadays, by the steps of economy globalization moving more and more fast, lots of countries are involved in this world economy integration. As one of the worldwide business languages, accounting starts to play a key role in it. However, as we all know, there is a huge gap between Chinese GAAP and International GAAP. And it has brought a big trouble to Chinese enterprises, who were eager to be more international. During these days, those state-owned banks are quite busy. They are working hard on restructuring and preparing for being a listed company later. So how to solve the accounting problems became a key point. According to international convention, if Chinese bank wants to be listed in the worldwide area, it should follow the international GAAP. That's also why the new GAAP was born.Jan.1,2007, as the request of Chinese Finance Bureau, the new PRC GAAP started to be implemented with in all listed Chinese enterprises. During the new standards,, ,, are the most interrelated with the banking industry. Compared with past standards, the most obvious characteristic of the new accounting standards is the reutilization of fair value. So the promulgation and implement of these 4 financial instruments made everybody were curious about the influence of fair value method on banks. Actually it is not the first time for China to use Fair Value in its GAAP. Since currently, the market is not mature, and the law system still waits to be setup, there is much uncertainty on valuing the Fair Value properly. People wondered the use of Fair Value would impact our listed company, especially make a big influence to the banking industry.Taking the commercial bank which is affected by fair value accounting most as the research object, and combining the present situation concerning the research on fair value home and abroad, the paper demonstrates its necessity and feasibility as well as its theoretical basis, puts emphasis on the series impact which fair value accounting has on commercial banks'financial performance, owner's equity, capital adequacy, and accounting policies.Considering the factors as above, this thesis just chose Shanghai Pudong Development Bank, which is one of the listed banks in China, as its analysis initiative. The comparison is made by three aspects. One is accounting policy, another is the financial performance, and capital adequacy. By comparing the data with in year 2005,2006,2007, and 2008, even including some support from the theories, the thesis tries to disclose the influence that may bring to the listed banking companies.Except the case study, this thesis also discusses the advices for the whole society to be more prepared for fair value accounting. On the other hand, the article introduces the challenges and opportunities that the listed banking companies may face.