Study Of The Fair Value Of Derivative Financial Instruments In China

The economy faces the increasing risk of loss by the complex and volatile market environment, and international has demands for increased risk. Therefore the derivative financial instruments arise from that and get rapid development. Since the birth of them, there have a lot of controversy on their measurements. When the fair value of derivative financial instruments is increasingly accepted, the financial crisis occurs. Until today, its measurement is still the focus of the study by financial sectors. Derivative financial instruments are still in the initial stage of development in China, accounting personnel can not be a clear understanding of its definition, and the fair value is full introduced only in 2006, it is still in the exploratory stage. The double difficulties result that the use of fair value in derivative financial instruments has a long way to go.This paper is based on this, to study the problems for the fair value of derivative financial instruments in China. On the base of the basic theories of the fair value and derivative financial instruments, this paper analyzes the current problems for fair value of derivative financial instruments, such as: unpractical accounting standards, and disclosure of the fair value of derivative financial instruments to misleading information users. Capital market development is abnormalities to impede the development of derivative financial instruments. Poor capital market information can not meet the use of derivative financial instruments measured at fair value. Internal control functions are ineffective, the risk early warning mechanism is not perfect, and external supervision is not effective who have inconsistent standards. The valuation techniques for the fair value of derivative financial instruments are lag. The practice ability and professional ethics of accounting personnel are poor, and so on. Through analysis, to solve the problems presented for different levels and different angles. Hope that the paper can do something for the development of the fair value of derivative financial instruments.