Discussion On The Fair Value And Its Application

With development of the market economy and the knowledge-based economy, the historical cost has been suffering from increasing criticism. In this process, Fair value, which can be fully reflect changes of the future economic environment, came into being and has been applying widely. Since 1970s, accounting field paid more and more attention on researches of fair value, and has achieved remarkable results. Fair value has gradually become a significant part of international accounting standards and accounting standards of many other countries, such as America. In our country, fair value was first referred in our accounting standards in 1998,then it gained wide attention and it was discussed whether this new measure attribute could be suitable in practice. However, many cheating affairs by manipulating profits in the way of fair value followed, and this force every part concerned to take fair value prudently. As a result, the measurement of fair value was avoided in actual accounting standards. Along with economic globalization, development of international capital marker and acceleration of accounting standard integration, the international accountancy circle has changed its attention from the necessity of fair value to how to use it. Under this background, our country's attitude should also change. So fair value has been added as measurements attribute to the newly issued accounting standard system on February 2006 and is reflected in many actual standards. But does it mean that fair value will be applied comprehensively in practice or our country has already gained all qualifications for fair value or how to guide and evaluate research and application of fair value by full use of international research results in China? They are the reasons I choose fair value as my topic and also the research objective of this dissertation. This thesis is divided into four chapters. Its main contents generalize as follows:Chapter I: Introduces the textual research background and the carrying on an overview to domestic and international relevant research on fair value.Chapter II: The basic theoretical issues outlined. The definitions of several measurement attributes in American accounting standards, international accounting standards, and our newly issued accounting standards are indicated to analyze issues of fair value: its meaning, its relations with several other measurement attributes and its way of confirmation.Chapter III: Application of fair value in accounting standards of foreign countries. It generalizes the using of fair value in IAS and FAS.Chapter IV: Applications of fair value in accounting standards of China. Reviews three phrases of fair value applications briefly in China. Comments on the new issued accounting standards and bring forward some suggestions about how to apply fair value in China.