Fair Value And The Relationship Between The Quality Of Accounting Information

The new accounting principles, published in 2006, are almost consistent with the popular international one. One of its most attractive points is the application of fair value in the fundamental principle and also in the most other specific principles. However, the appropriate application of fair value is still controversial among accounting theoretical field, as some experts insist that its application will decrease the relevance and reliabilities of accounting information, and therefore affects the its usefulness in the process of decision-making. Last century, some developed countries faced the same dispute and hesitation in the application of fair value, but now many countries and international organizations have accepted and adopted it widely. Therefore, we can do some research on the history and reality of the application of fair value in these countries and learn something from them. On the basis of this, clarifying the relationship between fair value and the quality of accounting information under our particular accounting environment will be good for the smooth application of our new accounting principles.The thesis will focus on the development and application of fair value from the perspective of the quality of accounting information. Based on full research on the relationship between fair value and the quality of accounting information, further analysis on whether the application of fair value can improve relevance and reliability of accounting information will be carried out from the perspective of both theory and reality.First of all, we analyze the relationship between accounting measurement attributes and the quality of accounting information, which means to review the transition of the measurement attribute form the aspects of quality of accounting information, and then concludes that the selection of measurement attributes should be based on the requirements of accounting information. Useful accounting information should be both credible and relevant. According to the present accounting environment and accounting objectives, the thesis reconstructs the relationship between relevance and reliability: to realize the harmony and unity of relevance and reliability. After this, a specific study on the theoretical foundation of fair value, the relation between fair value and other measurement attributes, and also its relevance and reliabilities is performed. Secondly, based on the review of international empirical study on the relation between fair value and the quality of accounting information, we focus on the analysis of a representative study carried out by Barth and Landsman in 1996.Last, we deduce some characteristics of the application of fair value in our new accounting principles and then design the empirical study on the value relevance of fair value in China.