The Reasonableness And Improvement Of Fair Value

Relating to the financial crisis in 2007 exploring the causes, a view that is a fair value exacerbated the current financial crisis. The reason is that with a pro-cyclical effects of fair value in the market when prices were inflated, prosperity, fair value has greatly promoted the inflated value of the assets, the fair value of the true value was completely overshadowed by a number of financial indicators for large organizations were misled by false beauty, competing for purchase of related financial assets will be price to a higher; on the contrary the market downturn, lower prices forced the bank to confirm the loss, this has also helped, loved one is more low, resulting in more confirmation of the loss.On this viewpoint, the author first of all start from the concept of fair value, Analysis of the characteristics of fair value, then the basis of price, value and fair value of the relationship between that fair value is the measurement properties of several of the most reflected in the price through the approximate close to the value of measurement attributes for the fair value of rationality found theoretical support. Next, for the fair value of the new accounting standards in China after the enactment of the actual effect of the test for the reasonableness of the fair value provides the empirical evidence.But I believe that, although the fair value has its own rationale but because in practice deviated from the fair value of the content, making it become the scapegoat for the financial crisis. This is mainly reflected in the market valuation of the market under the no clear limits with the model under the pricing has been a departure from the concept of fair value. In response to these shortcomings the author of the fair value of the improvements, the main idea is to develop specific guidelines for the fair value, abandon the model of valuation, the introduction of the definition of fair market elements to establish an independent intermediary mechanism or government departments at fair value recognition functions. On this basis, the current measurement mode has been improved enterprise assets (liabilities) are divided into the initial measurement of a unified measurement and subsequent measurement, the initial use of historical cost measurement, follow-up the measurement of fair value, when fair value can not obtain the time to use other measurement attributes for an alternative...