Fair Value Accounting And Its Value Relevance Research

As the one looking into the future and facing the21century, fair value measurement is a very meaningful topic which deserves researching. The application of fair value is tortuous.In2007, fair value was re-introduced into the new accounting standards of China, and then in2008, the global financial crisis happened, until2009, China has gradually been out of the shadow of the financial crisis.Under such background, I focused my research on the value relevance of fair value accounting in Chinese capital market, both with theoretical analysis and empirical tests. The result may help the standard setters to consider to what extend and at what level shall the fair value measurement apply.Through literature reviewing, we found that the research on fair value mainly focuses on normative research, and empirical researches are very little. While in foreign countries the research on fair value mainly focuses on empirical research, especially the on the value relevance of fair value, which provides guidance for our country to carry out empirical research. Now in the case of sufficient data, we could discuss this question:whether the fair value has the value relevance in practical application in our country, which has been in debate.Due to fair value development in our country did not last long, so this paper first expounds the basic theory of fair value, which provides a theoretical basis for the later value relevance of fair value in the practical application of our research.The paper mainly introduces the definition of fair value in FASB, IASB and our new standards,which shows a certain degree of convergence; fair value measurement attribute and the other measurement attributes are connected with each other, not independent; fair value hierarchy theory and the main method of measurement; Fair value has both relevance and reliability.Then the paper in-depth analyzes the application of fair value in standards, and what kind of effect on the financial statements. This paper mainly selects the following five aspects: recognition and measurement of financial instruments、investment real estate、exchange of non-monetary assets、debt restructuring、business combinations. We can see that the fair value measurement does have a great impact on the financial statements, which provides the theory basis for the understanding of the value relevance of fair value. Then this paper mainly adopts the empirical research method to discuss whether the value relevance of fair value is shown in the practical application. This article is divided into six chapters, the three chapters before are the theoretical part and the next three chapters are the empirical part. The theoretical part includes the introduction, literature review, theoretical basis and application in standards. The empirical part includes empirical design, the empirical results and recommendations. And theoretical basis includes the definition of fair value, the relationship with other measurement attributes, the measurement methods, the relevance and reliability of fair value. Application in standards includes the development in China and the application in new accounting standards.Finally, in order to better application of fair value, the paper offers following discussions: establishing a separate measurement standards for fair value、improving market conditions for fair value Application、establishing audit system for fair value、improving the occupation moral level and professional skills of accounting practitioners.