Value Relevance Of Fair Value Hierarchy Information On Investment Property

After theoretical and practical research in a long period,fair value has been widely recognized as an advanced measurement attribution,and relevant standards system has shown international similarity.‘Accounting Standards for Enterprise No.39-Fair Value Measurement’ was issued in 2014.Because of this standard,the application of fair value in our nation has greatly improved,especially by providing additional hierarchy information.Investment property is an important non-financial asset,and studying the current situation and problems of its fair value measurement has theoretical and practical significance for the application of fair value in China.This paper takes A-share listed companies which used fair value to measure investment property from 2011 to 2016 as a sample,in order to explore value relevance of fair value and its hierarchy information on investment property.Through statistics,it is found that the amount of listed companies which use fair value to measure investment property is increasing,but still under 5%.Also,fair value is mainly composed of second hierarchy,and the relative scale of related financial data is abnormal in several companies.Empirical analysis shows that under fair value mode,accounting information on balance sheet and income statement created by investment property has value relevance.What’s more,first hierarchy fair value has higher value relevance than second hierarchy,and third hierarchy fair value has no value relevance.According to the statistical and empirical results,this paper believes that it is necessary to build the relevant market environment system,strengthen the monitoring of abnormal changes in fair value,and improve accounting standards system of fair value.