Research On The Reformation Of Fair Value Caused By The US Sub-prime Crisis

The new Accounting Standards for Business Enterprises was promulgated in 2006. And it was used by listed companies in 2007. The fair value as accounting measurement was used in these Standards. It was an important indicator of convergence between China's accounting standards and international accounting standards. However, due to the broken of Sub-prime Crisis, fair value accounting standards which were considered advanced once, have been accused of aggravating the crisis as one of the important factors. Are Fair Value Accounting Standards wrong? Is it the source of aggravating this Sub-prime Crisis?This article studies on the process about Sub-prime Crisis and the countermeasure about how to fix up this crisis. The countermeasure based on evaluation and analysis of fair value. Because the fair value model is the only suited model among financial instruments and it shows some advantages in replace of historical cost model. This article, through introducing the revelation which was brought by this Sub-prime Crisis, put forward some specific implementation details, in order to constantly improve the recognition of fair value standards, measurement methods and disclosure requirements.Sub-prime Crisis was produced by the over securitization in capital market, financial institutions over-leveraged, over-the liberalization of financial regulation and excessive debt. Accounting standards is not the culprit. But, in practice, the market pricing which based on "non-fair", play a certain effect of adding fuel to the flames. Improving the fair value is not a negative to its scientific core. It can establish an effective mechanism to adjust the accounting framework of fair value in non-active, non-rational market. And it can consider how to ensure reliability, relativity and comparability of accounting information.Accounting valuation is the core issue of accounting. In face of the fair value which was accused because of Sub-prime Crisis, we should Change challenges into opportunities, manage to improve the measurement methods and measurement basis.