Investment Real Estate Fair Value Measurement: Impact And Economic Consequences

The price variation of real estate,which represents the fluctuation of regional markets to some degree, makes their current prices deviate from original book values. In this case, it is hard to figure out the motivation of holders and the tr ue price of their holdings when the real estate is basically equivalent to the fix asset. In such environment,Investment Real Estate, as a special form of asset, C hina’s first non-financial application calculated and measured through a fair of pat ter and it is receiving more, and more international recognition and attention. So t his model to China will give enterprises more options, also managersthemselves s hould compare and analyze the two modes on account of their actual of situatio n to make a reasonable choice.The fair value model can partly reflect the current price of real estate for i nvestmentpurposes, however, forlack of active trading market, the confirmof fai r value may be influenced by human intervention, and then, to some degree, beco mes embodiment of management’s subjective meanings. The most direct manifestati on ofsuchmeanings, which will damage the interest of all stakeholders, is the huge i ncrease of surplus. So those information users that benefit connection with the list ed companies must step up their vigilance on the model.This test,summarizing the domestic and foreign research achievements about the fair value model and marking San Mu Group Corporation as a case study, tr ies to explain the stock and increment of Investment Real Estate, and then the i nfluences on financial statements and other financial targets by analyzing theenterpr ise behavior after using the fair value model. At the same time, this text, which is on behalf of related people, will analyze the economic consequencesto informa tion users brought by such behavior and will give feasible suggestionafter studyin g and summarizing the internal rules of the fair model being used in public com panies.