Commercial Bank Loans Measurement Attribute Selection

Recently,financial instruments pose a great challenge to the accounting measurement. Under the traditional accounting framework, many company immersed in financial dilemma due to financial instrument transactions, although their financial statements displayed good management performance and health financial standing. How to properly measure the financial instrument attaches great important to financial accounting. Accounting standard setter use fair value accounting to resolve this problem and we have a mixed accounting model in financial accounting. The trading book of financial institutions will be measured under fair value accounting. Now, accounting standard setter goes beyond the trading book and wants to use fair value accounting measuring all the financial instruments which is called full fair value accounting model. As to this currency, the central banks and banking regulation committees have different idea. The most interesting problem is the measurement of loan, which is the biggest part in the bank asset. Which measurement base is better, historical cost or fair value or anything else? This paper wants to weight the advantages and disadvantages of these measurement bases and have a tentative conclusion. This paper is organized as follows:Section one: the introduction of accounting measurement. This section discussions some concept problems in accounting measurements and analyzes the most common used accounting: historical cost and fair value. Especially, the author analyzes the definition and development of fair value. At last, I review the replacement of historical cost by fair value.Section tow: construct the framework of evaluation criterion. The debate between accounting standard setter and...