Study On The Application Of Fair Value In Our Country

With the development of the times, people have made a higher demand in the expression of accounting information timely and fair. Fair value measurement has become a hot problem to research. Countries are studying the application of fair value measurement, to face this international background, the traditional historical cost measurement has no longer meet our current needs, so we should study the fair value measurement model actively. In 2006, China promulgated the New Accounting Standards and fair value is recognized as the biggest highlight of the New Accounting Standards. The application of fair value has been paid more and more attention.In this paper, at first we analyzed the theoretical basis of fair value, and then we searched the application of fair value on financial instruments and inventory items right now, at last we analyzed under the China's market economy system the application of fair value's shortcomings and gave my own advice.I started from the meaning of accounting measurement, followed by a detailed analysis of accounting measurement elements. Through analysis, I believe that a complete accounting measurement models should normally include measurement object, measurement units and measurement attributes, the accounting measurement attributes is the most important factor of accounting measurement. Now there are five generally accepted accounting measurement attributes: historical cost (historical income), current cost, current market value, net realizable value, present value. Fair value is embodied as a general term of accounting measurement attributes system. After the study of accounting measurement, the author analyzed the meaning of fair value, the essential characteristics of fair value, the relationship with other measuring attributes, and the identification ways and methods. I pointed out that a scientific value measurement should be fair, impartial and recognized. In the practice of accounting measurement, as long as they can meet the mode of fair accounting measurement, it can be seen as consistent with the fair value connotation.After the study of a few basic questions of fair value, the author studied the application of fair value measurement both in international and domestic situation. International Accounting Standards Board and the U.S. Financial Accounting Standards Board invested a great deal of time and energy, and made tremendous contributions in the research of fair value measurement. China's new accounting standards system is still cautious on the use of fair value, but it has been achieved breakthrough.The research of financial instruments and inventory items in China is the most important. After the study of relevant guidelines in at home and abroad, and a lot of papers, the author considered with China's specific conditions, for financial instruments and inventory items, I conducted a study and made my own conclusions. On the financial instruments project, the measurement of financial instruments is more consummate, and fair value is the best properties for the financial instruments. I am sure the mixed-measurement model in followed measurement is well, but the mixed-measurement model also has defects. I also studied the identification logic of fair value, and pointed out that the determination of fair value in our country has a certain degree of subjectivity. On the inventory items project, this paper analyzed to identify the net realizable value of inventory items, which are the main factors we should consider. When the company determines the net realizable value, we need to consider many factors and the main consideration is the ability to obtain conclusive evidence and the purpose of holding inventory. Then I proposed an innovative project that we should increase the disclosure scope of the inventory. Although China's new accounting standards for disclosure requirements of inventory items is very clear, I believe that it is not exhaustive. At last I propose an idea that we should establish a dynamic database for inventory, which is conducive for enterprises grasp the estimated selling price and time changes in the market.The final chapter of this article discussed the obstacles in the application of fair value measurement in our China, and put forward my own effective view. The author believes that the main obstacles in the application of fair value measurement there are four: China's market economy is not mature enough, the determine technology of fair value is not consummate, the accounting standards system is not complete, and the quality of accounting practitioners is not high enough. Although the application of fair value measurement in China have faced a lot of problems, but it is still has great advantages, it will sure become China's future development direction of accounting measurement, it also will become an important prerequisite for financial reform in the 21st century. The application of fair value in the New Accounting Standards is not only the convergence of international applications, but also fit our actual situation. We should build a complete, unified, open, fully competitive market environment for the application of fair value and create a good environment. We should perfect the relevant laws and regulations system, to build the institutional foundation for the use of fair value. We should enhance the level of practitioners, accounting practitioners must not only enhance their professional capacity, and they should enhance their own moral realm as well. We should strengthen the quality of auditors, to monitor China's accounting practices comprehensively, especially in the application of fair value in the asset and liability measurement. In short, we need to explore theoretical and practical studies constantly, as long as we do our best on these four aspects, the fair value measurement must be able to get good use and the fair value measurement model must be the main mode of accounting measurement in the future. Of course, we should recognize that in our country historical cost and fair value will both exist for a long period of time. We do not lose heart and do face this situation actively and we should reference to fair value measurement of the international standards. For the application of fair value measurement in our country, we must make unremitting efforts.