Property Rights Protection And Accounting Measurement

The combination of property rights protection and accounting measurement is the necessary requirement of the development of proper accounting, and is the fundamental approach in solving problems appearing in studying accounting measurement especially fair value accounting measurement. This paper establishes a system on how to analyze property rights protection and measurement, analyzes the influence on investors'property right protection resulting from the choice of measurement attributes from decision usefulness and accountability, and put forward some suggestions on the foundation of fair value accounting measurement standards considering property rights protection.The close relationship between the modification of property rights structure and property right relationship and the evolution of accounting shows that it is inevitable demand to make a research on the choice of measurement attributes on the guidance of property rights protection. Accounting objective is the basic point for the frame of accounting system and is the logic starting point for the research on measurement attributes on the guidance of property rights protection. The qualitative characteristics of financial reporting information are the bridge between user-oriented objective of financial reporting and measurement attributes. Fair value has its incomparable superiority over history cost in view of relevance, faithful representation, comparability, timeliness and understandability. History cost has stronger indirect verification, but fair value has stronger direct verification.Compensation contract shows the consistent principle of incentive and control. On the basis of history cost, revenue can accurately represent managers'effort and their ability responding to market risk. But the cost can't accurately represent managers'effort and ability. Fair value measurement can solve the problem of how to match revenue and cost. Non-recurring profit and loss resulting from fair value measurement shows the ability of managers' facing market uncertainty. In terms of debt contract, it is necessary to revise measurement attributes using prudence principle in order to reducing conflicts between creditor and debtor. There is no need to thinking over prudence principle when we build general accounting rules, considering restrains of stakeholders and the need of protecting stakeholders' property. In fact, if fair value measurement is reliable, financial accounting information based on fair value can solve many problems resulting from history cost and prudence principle and is helpful to evaluate corporations'debt paying ability.Because of the imperfection of the efficient market hypothesis and rational investor hypothesis, the information view emphasizing history cost and income statement can't compass the task that is reflecting the property rights structure, defending property right relationship, and protecting the property right interests. In bounded rational investors hypothesis, the clean surplus theory supports fair value measurement. Prospect Theory based on bounded the hypothesis of rational investors is consistent with fair value measurement attributes, and they can form the theory foundation of fair value measurement in financial report jointly. Technically, market price essence of fair value can present and control property value movement. The true and fair essence of fair value fits basic requirements of property protection. Fair value's protection on investors' property depends on accounting information based on fair value can provide relevant and reliable information for investors. Empirical research on fair value accounting information shows that fair value information is relevant and reliable to some extend. The evidence from China's security market suggests that fair value measurements and fair value gains and losses enhance the ability of accounting imformation's expalanatory.Fair value contributes to protecting investors'property rights technically, but its premise is that the use of fair value in accounting standard system is consistent and effective. The deficiency of fair value accounting measurement in the new accounting standards and the institutional environment adverse to investors'property rights protection put serious influence on the effect of fair value. So it is necessary to establish specific fair value accounting standards, and to consolidate the property rights protection functions of fair value accounting standards.