A Study On Fair Value Accounting Principle Application In China

The complexity of the fair value application calls for the improvement of the methods and procedures. This dissertation combs the fair value accounting standards ,as well as the domestic and international achievements in theoretical research , analyses China's current technical difficulties of the fair value ,and provides suggestions to improve the fair value measurement.First of all, this paper identifies the technical definition of fair value,the level of fair value,fair value method of valuation,,and market conditions of using the fair value valuation technology from the United States accounting standards, International Accounting Standards,and the Chinese accounting standards .It combs the theoretical research in the area of the relation between the market conditions and the fair value valuation technology, the level of fair value, and fair value method of valuation .Then,it comes to the conclusion that the level of domestic researches are far behind that of the international researches,and emphasizes that domestic researchers should improve the research of the fair valuation technology,and solve the difficulty of the fair value application.According to the literature review,based on theoretical analysis of imfluence to the financial statements of quoted companies from the use of fair values ,this paper count statistics from 2007 annual report of quoted companies as samples, and comes to the conclusion that fair value of quoted companies application is restricted by market conditions,and fair values is used in a cautious way.In order to further determine the fair value application difficulties, this paper designs the questionnaire, respectively from angles of the the views and suggestions of accounting staff ,as well as the difficulties which corporate accounting staff will be encountered in application. Questionnaire is mainly related to the adequacy of the guidelines on how to obtain fair value and the depth measurement of the enterprise application of fair value accounting standards ,whether techniques are appropriate for corporate accounting staff to use the fair value accounting standards,and so on. Based on the statistic method , this paper get the conclusion that the accounting standard of fair value measurement is not sufficient, it can easily lead to earnings manipulation;people tend to disagree with the application of fair value accounting for there is no active market or observable market information;corporate accounting staffs generally agree that fair value measurement difficulty is the use of valuation techniques; most corporate accounting staff agree that it is not cost-effective for non-listed companies to use fair value measurement;the success of the fair value application in our country should have the three most important conditions:"perfect market system," "high-quality accounting staff, auditors, professional assessment", and "sound accounting standards" and so on.Through investigation and statistical analysis, this paper abstract the difficulty of the fair value application from market conditions, valuation techniques, and accounting standards.Then,it provides suggestions from improvement of the market environment, the establishment of high-quality data on market transactions in the database; a well-estimated the fair value of the value of technology, standardized valuation technology options; reference of asset valuation techniques to reduce the fair value of acquisition costs; improvement of the quality of accountants; improvement of the financial information system ,and so on.