Fair Value Accounting For Listed Banks

Nowadays, by the steps of economy globalization moving more and more fast, lots of countries are involved in this world economy integration. As one of the worldwide business languages, Accounting starts to play a key role in it. However, as we all know, there is a huge gap between Chinese GAAP and International GAAP. And it has brought a big trouble to Chinese enterprises, who were eager to be more international. During these days, those state-owned banks are quite busy. They are working hard on restructuring and preparing for being a listed company later. So how to solve the accounting problems became a key point. According to international convention, if Chinese bank wants to be listed in the worldwide area, it should follow the International GAAP. That's also why the New GAAP was born.Jan.1, 2007, as the request of Chinese Finance Bureau, the new PRC GAAP started to be implemented within all listed Chinese enterprises. Reviewing the new GAAP, the most different point is the application of Fair Value. Actually it is not the first time for China to use Fair Value in its GAAP. Since currently, the market is not mature, and the law system still waits to be set up, there is much uncertainty on valuing the Fair Value properly. People wondered the use of Fair Value would impact our listed company, especially make a big influence to the banking industry and investing real estate industry.Considering the factors as above, this thesis just chose Shanghai Pudong Development Bank, which is one of the listed banks in China, as its analysis initiative. The comparison is made by two aspects. One is accounting policy, the other is the financial performance. By comparing the data within year 2005, year 2006 and year 2007, even including some support from the theories, the thesis tries to disclose the influence that may bring to the listed banking companies.Except the case study, this thesis also discusses the constraints that Fair Value may have in our accounting practice. On the other hand, the article introduces the challenges and opportunities that the listed banking companies may face.