Empirical Study Of Fair Value's Influence On The Performance Of Listed Companies

With the rapid development of the process of worldwide economic integration, for making our country participate in international competition and cooperation fully, accounting began to search the international convergence. Ministry of Finance of China released a new set of accounting standards on February 15th, 2006. New accounting standards have been formally inplemented in the listed companies since January 1st 2007. 19 of the new guidelines related to the fair value, primarily in the financial instrument, invested real estate, merger, debt restructuring and non-monetary assets and other specific criteria. The introduction of fair value will impact on the performance of listed companies.Firstly,the paper made a systematic review of the theory associated with the fair value and the application of fair value in China.Secondly, based on the theory analysis of the fair value's influence on the performance of listed companies,the paper established the regression analysis model of the fair value's influence on the performance of listed companies.Thirdly, based on an overview of the total samples and the classification samples, the paper analysed the fair value's influence on the performance of listed companies in China from 2007 to 2009 through the regression model, and the paper made a comparative analysis of fair value's impact on the performance of the five industries of sub-sample in the same period of time.The results showed that:â‘ the fair value with performance of listed companies in the total sample were positive correlated;â‘¡fair value primarily affected the performance of listed companies by operating profit, investment income, operating income and changing in fair values;â‘¢the performance of listed companies were not obvious in 2007, the impact of fair value of listed companies'performance enhanced in the year 2008 and 2009;â‘£fair value's influence on the performance of different industries sub-sample were different: the fair value's influence on the performance of securities and insurance were large; little effect on the banking industry performance; little impact on real estate performance; on animal husbandry and fishery performance was hardly affected; the fair value of the metal and nonmetal sector performance had almost no impact.Finally, on the basis of research above, the paper put forward some policy recommendations in order to make the application of fair value in our country smoothly.