Dissertation > Economic > Economic planning and management > Accounting > Accounting Organization and system

Research on the Reliability and Value Relevance of Fair Value Accounting

Author ZhanXing
Tutor LiuBin
School Chongqing University
Course Applied Economics
Keywords Fair value Reliability Decision usefulness Estimated fair value hierarchy
CLC F233
Type Master's thesis
Year 2011
Downloads 527
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Decision-usefulness view advocated by improving the measurement methods to ensure the quality of accounting information, and modern financial accounting reports useful for decision-making is an important goal. Produce guidelines for fair value measurement is to adapt to the demands and needs of economic development comes as a measure of fair value accounting could represent the future in the 21st century accounting measurement mode, by the United States and some other developed market economy wide to accept that these countries will have to measure the fair value of the property as the preferred use of them, we can see, as opposed to historical cost-based measurement model, the fair value is gradually revealing the advantages in information disclosure, and the popularization and application of public value accounting fundamental purpose is to improve the reliability and value of the accounting information related to a more realistic reflection of its asset prices and income, to provide investors with more conducive to their economic decision-making accounting information. 2006, in order to achieve convergence with international accounting standards, China's Ministry of Finance released the application of fair value for the biggest highlight of the new accounting standards system, and in 2007 formally comprehensive promotion and application. Fair Value Accounting coincided been widely promoted in the world at the time, based on the fair value of the properties and their valuation, the fair value of many scholars questioned the reliability. 2007 by the U.S. subprime mortgage crisis caused by the global financial crisis became fair value in the international financial institutions and a number of political groups accused the object, and the deterioration of the financial crisis attributed to the use of fair value measurement mode. In China, the financial crisis, while promoting the use of fair value positive initial stage, China's capital market and the international market is relatively mature compared to the economic environment there is a big gap in the field of accounting practices is also a lack of experience. In this context, on the fair value of the reliability of China's capital market and the value relevance of research is very necessary. In this regard, the paper on the basis of the theoretical analysis through empirical research The main conclusions are as follows: ① through pricing model analysis, we found A-share financial listed company's stock price and the fair value of the net assets per share amounts significantly correlated , indicating that promoting the use of fair value accounting information can enhance the explanatory power, to improve the quality of accounting information has played a positive role model through two ② analysis, we found that the use of Level I input variables estimated from changes in the fair value and the amount of stock prices and annual yield significant positive correlation, while the other two levels are through the test of significance, indicating that the use of level I input variables estimated from changes in the fair value and the amount of input variables than the other two levels of the fair value estimates obtained and movements more valuable correlation fair value measurement reliability varies due to the fair value hierarchy, the use of different levels of input variables to get the fair value of the estimated measurement error in the accounting aspects of the existence of relatively large differences, investors are treated with different levels of input variables to get the fair value valuation conferred reference weights are not the same. The fair value measurement of uncertainty, volatility is derived from the level Ⅱ, III estimation error, the conclusion by the level I get input variable estimates the fair value of the input variables than the other levels of the fair value estimate to get more value associated with and, thus, more reliable. ③ In practice, the decision usefulness of fair value accounting in line with the accounting concept of objective and fair value model in the country to improve the promotion and application of accounting information disclosure quality, so that some social groups and individuals on fair value accounting questioned and vain plus accusations are biased; while in empirical tests, we should distinguish between the fair value of the input variables used in the valuation hierarchy for fair value measurement to the value of correlation test, otherwise, a variety of different indicators of measurement error mixed will not help draw the right conclusions.

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