Research On Enterprise Evaluation Method Based On The Fair Value Measurement

Since the1980s, as a brand new measurement method, the fair value in the international community had aroused a more extensive discussion. Since then, no matter the International Accounting Standards Board (IASB), or the U.S. Financial Accounting Standards Board (FASB), all promote the use and development of the fair value measurement by enactment of a series of relevant accounting standards. In order to strengthen the coordination and convergence of our accounting standards with International Financial Reporting Standards, in2007China’s Ministry of Finance introduced the fair value as one of the measurement attributes in the Accounting Standards for Enterprises. However, China’s research on fair value measurement is mainly based on the introduction of foreign accounting standards, assessments, relevant theoretical background and the difference in accounting information value relevance after introducing the fair value, without discussion on the application of fair value in the theory and methods of enterprise valuation.Based on the results of home and abroad theoretical studies, the article which uses literature, logical analysis and case analysis method discusses the enterprise value evaluation method that based on the fair value measurement. The discussion will promote the further application of fair value measurement in China and provide a certain degree of reference about enterprise value evaluation theory and practice. Firstly the article discusses the enterprise value evaluation theory and analyses the limitations of the existing enterprise evaluation method. Secondly, discusses the concept of fair value measurement, the pricing process and characteristics. Thirdly, build enterprise value evaluation model that bases on fair value measurement by logical analysis. Finally, selecting the listed companies in China Baiyun-Mountain A as a case, explain the applicability and effectiveness of evaluation method. The demonstrated results show that the evaluation model is closer to enterprise’s "fair market value" in theory and more Operable in the practical application. Thus investors can be better able to understand the connotation of fair value, and to guide investors to make investment decisions in the secondary market and avoid blind investment.