Empirical Research On The Application Of Fair Value Measurement Model Of The Investment Property

The new enterprise accounting standards put forward fair value measurementmodel under some certain conditions in2006. It is very important for the enterprise’sinvestment property value to be reflected objectively, while also contributes to thefurther convergence with international accounting standards. However, fewcompanies are using the fair value model since the new standards have come into use.By analyzing the potential influences from fair value model on the business financialindicators, enterprise managers are expected to make an advisable accounting policy.The study is attempted to check whether the accounting information generated isrelevant to the value; and whether the use of fair value model indeed enhancesdecision-making ability of investors. The evidences of implementation effect areexpected to be obtained to provide support for the formulation of standards, further topromote the use of fair value in the investment property in China.This article uses the method which unifies the standardized research andempirical research. Firstly, the related concepts of the investment property aretheoretically introduced, on basis of which, the advantages and disadvantages of twokinds of measurement model are discussed. Secondly, A-share listed company’sfinancial data and market data during2011and2013are used as the research sampleand the present situation of investment property measured at fair value is analyzed.The influences of fair value on the main financial indicators are studied, such as debtpaying ability, operation ability and profitability. Thirdly, the Ohlson price model isused to carry out the regression analysis, in which the relationship between the samplecompanies’ stock prices and the accounting data disclosed in the annual financialreports. The study is attempted to check whether the use of fair value can provideinvestors with valuable information. Finally, by revising accounting standards,improving the real estate market as well as enhancing the company’s own ability, theapplication of the fair value model in investment property will be further improved.