The Concept Of Fair Value System

In this paper, the author mainly used the method of normal study, the paper also had a reference to the CF (Conceptual Framework for Financial Accounting and Reporting) of FASB, and mainly studied the issue of fair value accounting, the main points are as below:Chapter 1, introduction, introduced the meaning and background of this paper, reviewed the conclusion of the study in the past, and introduced the methods and structure of the paper.Chapter 2, study on fair value concept system, mainly discussed the definition of fair value, the fair value concept system, and focused on the issue of present value.Chapter 3, the influence of fair value concept system on current accounting theory, mainly reviewed the current accounting theory in the new fair value concept system, focused on the influence of fair value concept on accounting recognition, assets, liabilities, income, etc.Chapter 4, conclusion, introduced a few conclusion based on the paper, and new ideas, shortcomings in the study.Based on the paper, the author got these conclusions:1. In the time of knowledge economy, the economic circumstances changed rapidly, the accounting entity faced more and more uncertainty, the historical cost model was out of date, and it couldn't supply useful information for decision-making. The fair value model will become more and more popular. 2. The fair value concept has rich connotations and denotations, by making the concept as a core, the author formed a complete concept system. In this system, the quality character and concrete measurement techniques can be combined together, directing the accountancy.3. After making fair value as a core, the current accounting theory would be influenced to a large extent. The cash basis will combined with the accrual basis, and it will become the dual basement for accounting recognition. The accounting elements, such as assets, liabilities, income and so on, will have to change their definitions in order to reflect the fair value concept.There are some new ideas in this paper:1. The author reconstructed the fair value concept system, put forward some new concepts, such as general fair value, special fair value, fair price, etc.2. Using a time axes, the author studied the accounting recognition basement from the angle of uncertainty. Compared with statistics, the author pointed some inherent shortcomings in accounting.3. The author introduced current definitions of assets and made simple remarks, giving a direction for a better definition.4. The author studied the fair value of liabilities, pointed that because of the speciality of liabilities, we shouldn't use exchange value as fair value, entity specific value would be better. In order to make sure this figure had a reasonable reliability, more disclosure are needed. When it comes to talking about credit standing, the author suggested that we should respect the tradition and conventions, and be cautious to making any big changes.5. The author advised importing "colorful income statement", reporting comprehensive income.There are some shortcomings in this paper:1. The author mainly used the normal study method, got little support from the empirical study, and this paper focused on theory only, didn't give specific directions for accounting practice.2. The author didn't give a new definition for assets. The rapid change in economic environments determined that fair value model fited the future, and the effort in this paper was quite limited, the author hoped more and more experts pay their attention to this area to promote the development of fair value.