The Research Of Fair Value Model In The Application Of Investment Property

Historical cost has been the main way of accounting measurement, because of its reliability and prudence. With the changing economic environment, historical cost is more and more difficult to adapt to the trend of economic development, its malpractice is becoming more and more prominent. The fair value model is an important supplement of measurement model. Fair value can reflect the change of the market environment, it can also overcome the shortcomings of historical cost. Fair value has been recognized for its own superiority, and introduced to the International Financial Reporting Standards. In order to comply with the International Financial Reporting Standards, China’s Ministry of Finance introduced fair value to new accounting standard in 2006, while investment real estate accounting standard(CAS3) was also introduced to the new accounting standards in the same year. According to the investment real estate accounting standard, investment real estate measured through the cost pattern, fair value model can be used while meeting conditions for fair value. The company can choose to use the fair value model as subsequent measurement. Since 2006, nearly ten years has passed, the fair value has not been widely used in the measurement of investment real estate, there is what kind of reason which restricts the application of fair value in the worthy of our study. Although the use of fair value measurement of the company is not much, but still keeps an increasing trend year by year. What kind of company is more inclined to choose the fair value model, what characteristics do these companies have in common, this paper is trying to answer the above questions.In this paper, we first discuss the condition of the selection of measurement model by listing companies and the characteristics of the companies using different measurement models. Next, we still use the method of quantitative analysis to study the effect from changing measurement model. We want to discover the influence factors in the choice of measurement mode from above study, including external factors and internal factors. Finally, we do a case study of listing company Shen Guoshang(short for Shenzhen International Enterprise CO.,LTD), we study the background and the economic results of measurement selection by Shen Guo Shang.