Study On The Fair Value Accounting Measurement And Application

In the knowledge economy, the economic environment fluctuates violently. The book value of accounting entity's economic resource bases on the historical cost can't reflect its market value, which misleads the decision of investors. An economic value that can reflect real condition of enterprise resource and abandon the historical cost comes to birth. That is fair value. In recent years, internationally discussion has focused on application details, not the rationalization of fair value in financial accounting. Fair value has been the main tool of recording financial assets in the financial standards. It has gradually record some non-financial assets, which may totally replace historical cost in the future. With developments of global economic integration and international coordination of accounting, our extensive use of fair value will be unavoidable. The new accounting standards issued by Chinese government require the listed companies to record financial assets at fair value in financial statements. The thesis will focus on the difficulties and suggestions about the use of fair value in China.