An Empirical Study About The Value Relevance Of Fair Value Accounting

With the continual development of the capital market and the improvement of the degree of the dispersed ownership, the accounting target has turned from the fiduciary duty concept to the viewpoint of decision usefulness. Meanwhile an American expert named Beaver also pointed out that the highest goal of the accounting information was the usefulness of the decision-making. Under the premise of the decision usefulness, added the interaction of the Clean Surplus Theory and the empirical conclusions, it promotes the accounting turning to the measurement theory from the information concept, along with which the fair value measurement was born. The birth of the fair value prompts the accounting standard makers introduces the fair value measurement to the standards in order to enhance the value relationship of the content of the accounting information. About the related guideline of the fair value abroad appeared relatively early, but only until 90s of the last century it has received important attention increasingly and aroused widespread discussion. Currently, the fair value measurement has become the first choice about the measurement basis by US GAAP and IAS, moreover it has been made the main attribute for the subsequent measurement with the financial instruments.It has been very cautions when it comes to the use of the fair value in China .that is the fair value was partly introduced to accounting standards but was deserted fully in 2001; until 2006 the fair value was used popularly again in the new "Enterprise Accounting Standards" issued by the China's Ministry of Finance at the background of the convergence of the IAS, along with the improvement of the China's market economy. But China's market environment is not so perfect as international market, moreover there is still some difference when China's enterprises are geared to the international context, including the lack of related experience in the practice area and the 2008 world economic crisis, above of which makes the use of the fair value get much suspicions. In such circumstances, to discuss the applicability of fair value in China and its results of the implementation is very necessary. Based on this through the theoretical analysis and empirical research this paper has some main conclusion as followed:(1)The total sample test results show that there is a significantly positive correlation between the change amount and yields d of fair value and the stock price, still such is existed between the change yields d of fair value and the stock price in 2008-2009. Above conclusions reveals to some extent that in the new accounting standards, the use of measure increases the information content of the accounting information that is the use of the fair value has significantly increased the value relevance of the accounting information.(2)For the sample company groups that are profitable but not ST, when they used the fair value, the value relevance of the accounting information had increased compared to the whole samples, and there is a significantly positive correlation between the change amount and yields d of fair value and the stock price or the cumulative return; But the value correlation is not significant when the fair value was used by those ST or deficit Companies. Investors are more sensitive to the profit than the loss arising from the change of the fair value.(3)There is a significantly positive correlation between operating assets related to the enterprise business activities and financial assets related to the financing projects, but compare to this, the value correlation of the financial assets is more significant than the operating assets.(4) The overall regression results also show that, compared to the net assets, the surplus information receives more attention by investors, that is compared to the intrinsic value of the enterprise, investors pay more attention to the expectation about the future value of the company. The results of this study can effectively dispel doubts on the use of the fair value, and prove that the use of fair value in the new guidelines significantly increase the value relevance of the accounting information. However the fair value is a very complex system engineering, which means there are still many areas needed to be improved and perfected. So in the light of the actual situation in China, combined with the empirical results, this paper puts forwards with some corresponding policy recommendations in the end.