Research On Fair Value Measurement Under The Accounting Standards Of Financial Instrument

It is known that fair value can truly reflect the financial conditions of cooperation andprovide the users of financial statement with more integrate and transparent information, sofair value became the most relating measurement attribute of financial instrument. However,with the breakup of American subprime crisis in2007, the existence of fair value has becomethe strongest dispute among relevant international organization. The supporter advocate thatthe transparency of fair value can truly reflect the risky and fluctuation in financial market,and fair value is the only feasible measurement attributes at present. On the other hand, theprotestor believe that fair value is the accessory of financial crisis, and it exacerbate t heaffection of financial crisis. Therefore, it has practical significance to research themeasurement attribute of fair value under the current accounting standard of financialinstrument.This paper beginning with the basic theory of financial instruments and fair valueintroduces the definition, classification, characteristics, measurement attribute of financialinstruments and definition, characteristics and determination of fair value, and provide sometheoretical basis for the employment of the measurement attribute of fair value under theaccounting standard of the financial instrument. Then the paper analyses the necessity andinevitability of financial instrument’s fair value measurement based on the informationeconomics theory and capital maintenance concept, and believes that fair value is bound to bethe developing tendency of the measurement model of financial instruments. It also make aresearch on the similarities, dissimilarities and reasons of fair value measurement attributebetween Chinese and international accounting standards of financial instruments, and revealthe problem of measurement attribute of fair value under Chinese current accountingstandards of financial instruments. For example, it is lack of perfect, effective fair valuetheory guidance system. The reliability of fair value can’t be guaranteed. The volatility of thefinancial statements is large. China is lack of mature and effective marketing environment.Accountant’s professional quality and occupation moral level is low. To solve these problems,this paper put forward some suggestions as following: building perfect, efficient fair valuetheory guidance system, enhancing the reliability of fair value valuation techniques,improving disclosure requirements of fair value of financial instruments, establishing themarketing environment commensurating with fair value measurement, strengthening the education of accounting personnel and raising the morals level of accounting staff. The paperis hoped to offer some help for the employment of fair value of financial instruments.