Applied Research Of The Fair Value In Financial Statements In Listed Companies

In order to be consistent with international accounting standards, Chinese Ministry ofFinance published new accounting standards on February15th,2006. Compared with oldaccounting standards, one of the new accounting standards’ features was expanding theapplication of the fair value, and carefully introduced to the concrete standards combined withChina’s actual conditions. However, at the beginning of2008, the financial crisis whichcaused by the American loan crisis hindered the global economy development seriously.Many financial scholars put the blame of the fair value. They thought the fair value’s widelyusing was the root of this financial crisis. Through the efforts of accounting scholars the fairvalue is preserved, because the introduction of the fair value to financial accounting andfinancial statements is the inevitable result of financial innovation. Its existence anddevelopment don’t depend on personal likes and dislikes. The financial crisis shows theapplication of fair value is not mature. We should reform the fair value instead of abandoningit.Firstly, this article reviews the related study of the fair value of domestic and foreignscholars, and researches the fair value’s inevitability from its birth to application. Secondly, inorder to lay a foundation of following theoretical and empirical analysis, the article introducesrelated theory of fair value, including the categories of accounting measurement attributes andthe fixation of fair value’s measurement. Thirdly, according to the financial statistics of listedcompanies in CCER, the article studies the relation of net assets per share, earning per shareand prices per share to test the variation of accounting information’s correlation by residualincome valuation model and SPSS, and confirms the fair value’s reliability. Lastly, this articleconcludes that the fair value can enlarge the variation and reliability of financial statements bythe former analysis, but the application of the fair value needs to improve and perfect.