The Effect Of The Application Of Fair Value On Listed Banks In New Accouting Standards

In the development of fair value accounting, there are always existing some controversies about it. The financial sector, especially the banking industry, always holds skeptical view about fair value accounting. They also worry about the application of fair value will aggravate the frequent fluctuations of the financial institutions'operational performance and financial situation, which also poses serious threat on the stability of the entire financial system. In the Second half of 2007, the fair value which was called the "the main measurement methods in future" become the target overnight because of the global financial crisis triggered by U.S. subprime mortgage crisis. Well, weather the fair value accounting can withstand the test? How's the application of the fair value accounting in China? How to improve the use of fair value? These are all urgent problems which need us to solve right away.The financial crisis has caused tremendous shock on the global financial industry, leading to a wide range of bank failure, the application of fair value accounting in the banking industry once again becomes the focus of attention. This article is based on such a background and is combined with a practical case- Industrial and Commercial Bank of China as the research object. The research methods include historical review, theoretical analysis, comparative analysis and case studies. The basic idea is "History Review-Case Studies-Analysis-proposing a solution". The fist step is making in-depth comparative analysis of the relevant project through its annual financial report from 2005 to 2009 to reveal the specific effects which the fair value posing on the listed banks in China from the perspective of accounting policies and financial performance, then discussing various problems which are faced in the current process of the use of fair value in China on the system level. At last, making constructive comments and suggestions to expect fair value can get more recognition and use in the banking industry in future.