Research On Fair Value Measurement: Opinions And Reference From SFAS157

Value is the quintessence of economics, and the increase in value is the eternal pursuit of management science. Searching for the reliable value-measurement for making economic decisions is an inevitable puzzle for management science. Fair value is the accounting expression for the concept of value in economics and it's also the representation of the concept of present value which represents the essence of accounting elements. Fair value is well-founded theoretically. Fair value directs the future of financial accounting, implying the transition from cost-measurement to value-measurement. Nevertheless, there exist twists and turns in the propaganda for fair value accounting. Despite the strong supports from the IASB and FASB, the accounting practitioners always hold a conservative attitude towards the application of the fair value accounting. Among the many issues concerning the application of fair value accounting, the issue as to measurement is under the most heated debate. How to provide a reliable measurement for fair value remains an urgent issue for fair value accounting.To begin with, this paper reviews the history of the propaganda for fair value accounting. Along the track of history, this paper reviews the evolution of the concepts of fair value in accounting standards, the SFACs relative to fair value and the phases for the application of fair value in American accounting standards. From the perspective of positive research, this paper reviews many empirical results as to the value-relevance of the accounting information based on fair value and a conclusion is drawn that the fair value accounting will be both theoretically advanced and practically more feasible if the reliability of the accounting information based on fair value can be effectively enhanced. Following that, this paper provides detailed introduction to SFAS157, a lately issued SFAS in terms of fair value measurement. And a comparative study is done with the combination of SFAS157 and IASB's Discussion Paper on fair value measurements. SFAS157 will contribute to the enhancement of the reliability of the accounting information based on fair value. Later, some issues with SFAS157 are further discussed, among which are the fair value measurement under valuation techniques, the value basis for fair value measurement, the market participant concept, the liability's fair value measurement, etc. At last, some suggestions are provided for the fair value measurement in China. For instance, the definition of fair value in China's accounting standards should be equipped with both time basis and value basis. And an accounting standard and its framework in terms of fair value measurement should be constructed.