An Empirical Research On The Relation Between Fair Value And Predictability Of Earnings Of Chinese Listed Companies

The application of fair value measurement has become more and more popular in accounting and many other measurement subjects of economics in the late 20th and the early 21st century. And fair value is a very important measurement attribution in many accounting standards such as the U.S. Accounting Standards, the International Accounting Standards, and the China's Accounting Standards. The earnings'predictive ability of fair value has significant influence on investors'decision and the predictability of earnings also reflects the degree of value-relevance of fair value.Scott, Ge Jiashu, Du Xingqiang thought that fair value has impacts on the predictability of earnings because of it facing the future, but Mary. E. Barth thought that fair value has no impacts on the predictability of earnings because there is too much estimation. So why, how and to what extent does fair value impact the earnings'predictive ability of public-listed companies? This dissertation mainly uses empirical research and combines the normative research method and empirical research method to analyze how fair value impacts the earnings'predictive ability of Listed Companies. This study not only is a new attempt to analyze earnings'predictive ability, but also a useful exploration to study the value-relevance of fair value on the earnings'predictive ability perspective.The main conclusion and contribution of this dissertation are as follows:①This dissertation uses descripitve statistical analysis to analyze the data collectd of the listed companies in China. The results indicate that fair value does not cause procyclicality; the using of fair value has a significant influence on the earnings of the listed companies; the using of fair value does not intensify the fluctuation of earnings, on the contrary the using of fair value reduces the fluctuation of earnings in some degree.②This dissertation uses one-step ahead time series forecast models to predict earnings and compares the prediction accuracy by using empirical method to analyze the influence of fair value on the earnings'predictive ability of public-listed companies. The results indicate that only in a specific period does fair value impacts the earnings'predictive ability of listed companies.③The influence of fair value on the earnings'predictive ability of public-listed companies reflects the earnings'predictive ability of fair value; the degree of the earnings'predictive ability of fair value also reflects the value-relevance of fair value. In conclusion fair value has no predictive ability of earnings and no value-relevance except in individual period in insurance companies.