Research On The Measurement And Application Of Fair Value

The most of countries in the world adopt historical cost measurementarbitrary contemporary. The main reason is that the basic materials are easyto get. With the disintegration of Bretton Woods System, there have beenlots of financial instruments especially many derivative financialinstruments brought out, which leads to the measurements of historical costmode is hard to deal with the tendency gradually. In order to break thedifficult situation, FASB and IASC have being tried their best to find a wayto keep the accounting information's quality. Fair value is viewed as acrucial key to solve the problem and its scope of application has beingexpanded. In February, 2006, the Finance Ministry had formally introducedthe new principle of accountancy, fair value has been focusing on again.The application of fair value in mainland is not smooth for the sake ofevery new thing has a course to be accepted. To recognize the fair valuethoroughly, this thesis compares the concept of fair value which given bystandard-making institutes and experts, and analyze the concept from theviewpoint of value and by dint of the thoery of Efficient Market Hypothesis.Subsequently the measurement of fair value is compared with other valuemeasurement attribute and the difficult point of fair value measurement is illustrated by the way of traditional present value based measurement andOptions. The use fair value to measure is illustrated from the techniquelayer and examples.Following the application of fair value are explainedboth at home and in SFAS and IAS. One the basic of it, the reason of theapplication of fair value is not smooth and suggestion of the application offair value is put forward.The thesis is consisted of six chapters.The first chapter introduces the research of background, meaning.The second chapter clarifies the essence and concept of the fair valuefrom the angle of value and market, and explains the differences ofrelationships from other measurement arbitrate.The third chapter analyzes the recognition of fair value. The use fairvalue to measure is illustrated from the technique layer and examples.The forth chapter enumerates the applications of fair value in the threesteps in details.The fifth chapter introduces meaning and the chances of the fair valuein SFAS and IAS introduced by FASB and IASC.The sixth chapter comments on the causes of the dilemma of theapplication of fair value in mainland from the angle of market and thefactor market and accounting goal, and suggestions of the application offair value are put forward.