Research On The Value Relevance Of Fair Value Accounting Information Under Hierarchy Theory

Fair value has always been controversial and the comparison between historical cost and fair value has never stopped. In recent years, along with the development and application of fair value, academia and practice circle have done a lot of research, they generally believe that fair value measurement attribute is better than the historical cost on reflecting the value relevance of accounting information and provides users with the most valuable information for decision making, so the fair value measurement has been promoted and wide used in the world.In the early 2014, the ministry of finance issued the CAS 39, the fair value criteria,which shows our determination to application of fair value in our country and the strive to converge with the international standards. By using the normative research method and the empirical research method, this paper made an empirical analysis of the value relevance of different levels’ accounting information to study the fair value hierarchy information disclosure degree of recognition of our capital market in order to provide empirical evidence to the application of CAS 39.In this paper I summarized the research literature by scholars at home and abroad about the fair value of the progress on the guidelines and in academia, and generalizes the research literature of the empirical industry, introduced the related concepts involved and the theoretical basis of the fair value relevance in this paper, and then I discussed and summarized the application of fair value in our country in this paper. Under the support of relevance theory and in the fair value hierarchy framework and value, I used the Ohlson price model and its derivative model, choosing the date of A-share financial industry listed companies in our country from 2010 to 2013 as samples, making an empirical analysis of the value relevance of different levels’ accounting information to study the fair value hierarchy information disclosure degree of recognition of our capital market. The study is in order to provide empirical evidence for further research and the follow-up study, what’s more, it can provide advice for listed companies and investors.Here is the result of the empirical analysis: Firstly, investors really value different levels of accounting information disclosed by the company, which suggests that investors pay attention to the fair value of the input value source of information and investors trust the company which disclosed the fair value hierarchy information more than which didn’t disclosed the fair value hierarchy information. The conclusion above provide a positive guidance for the listed company.That means in after a year’s annual financial report of listed companies should strictly in accordance with the provisions of CAS 39 standards in China as far as possible perfect and comprehensive to the different levels of information disclosure in order to meet the decision usefulness accounting objectives. Secondly, judging from the overall fair value relevance of accounting information, the regression coefficient of the fair value of assets pass the 10% level of significance test, which means the fair value of assets has value relevance with the company’s share price, while the fair value of liabilities failed the significance test, which means the fair value of liabilities doesn’t have value relevance with the company’s share price and the investors do not value the information of this level. Lastly, in terms of different hierarchy correlation information, the first and second level information can well explain the change of the company’s share price and sample for stock up positive and has incremental value relevance and the first level information has more value relevance. The coefficient of the third level information didn’t pass the 10% level of significance test, which means that investors do not value the level of information.According to the research conclusions, this paper puts forward four suggestions: The first, standards establishing department should provide guidelines about the estimate of fair value under the non-active market. The second, the listed company should increase the disclosure of the second and third level of fair value accounting information and formulate unified standard on disclosing the hierarchy information. And the third, promoting the corporate credible evaluation institutions entrusted to intervene for the measurement of the fair value of assets and liabilities. The last but not the least, measures should be taken to improve the professional quality and ability of the financial staff.