Analysis Of The Application Of The Fair Value Of The New Accounting Standards In China

Since the early 1990's, with the continuous development of economy and the production of large numbers of financial derivatives, the limitations of traditional historical cost measurement attributes become increasingly prominent; meanwhile, the fair value accounting information becomes the trend in the field of international accounting because of its high correlation and timeliness, which compensates for the shortage of the traditional attributes. In the environment of international convergence, taking our present, basic conditions into account, China formulated the new system of accounting standards and adopted the fair value measurement attribute comprehensively and carefully. However, some problems appeared during the application process, which need to be solved, therefore, the research on fair value is very practically important.Research and discussion on fair value include many aspects, this paper simply studied fair value in its application in the new code:Firstly, the concept of fair value, its basic feature, its relationship with other measurement attributes and the fair value measurement methods were analyzed in theory; Secondly, the fair value measurement standards between the USA financial accounting standards board and international accounting standards board were studied comparatively. It thoroughly revealed the situation of fair value in accounting measurement and disclosure in China, and pointed out the main problems that existed during the specific application of the fair value, including:the lack of a sound, mature, effective market economy environment; the system of accounting standards is not sound; fair value disclosure is inadequate; implementation and supervision mechanism needs to be improved; the corporate governance structure is not standardized; internal control mechanism and management system should be further improved; and the quality of manager and staff is not high. Based on this, suggestions on six aspects were put forward for improving the application of fair value:1) Improve market economy environment and establish the market competition mechanism; 2) Formulate the fair value measurement standards and its application guidelines, providing theoretical guidance to fair value; 3) Develop and improve the relevant laws and regulations, providing legal safeguard; 4) Better auditing supervision mechanism, improve the folk audit quality; 5) Regulate corporate governance structure, improve the internal control system and the risk management system; 6) Strengthen professional knowledge and professional moral training, increase the quality of the management and accounting personnel, etc. This study on fair value includes not only foreign research achievements and trends, but also the application of fair value in China, and some policy suggestions were put forward to solve the realistic problems that were created after its introduction in China. In addition, this article collected the data on fair value in 2009 annual report, and using AVIC REAL ESTATE as example, analyzed and validated the influence of fair value measurements after its application, which, to some extent, compensated for the disadvantage of emphasizing theoretical analysis.