A Research On The Value-Relevance Of Fair Value

On February2006, Ministry of Finance issues the new accounting standards systems including1basic standard and38specific guideline and requires all listed companies to implement it starting from1st January2007. The new accounting standards included many great changes in some important aspects, and one of the key points is the use of fair value measurements. Fair value is the sum of actual or assumed fair transaction price of asset exchange and liability pay off made by both parties who are familiar with the situation in their own will, based on normal commercial consideration in the report day. From1990s, whether fair value has value relevance had raised an intense debate not only between accounting academics and practice, but also between accounting standard setters and certain supervising bodies. Our country has been quite cautious to the exertion of fair value all the time, although the reuse of fair value shows concurrency of accounting standards, there are still gaps in the theory and application between foreign and domestic research.This paper researches on the value relevance of fair value accounting in the accounting system. It selects the listed A shares as a sample and gets together four years dates, from2007to2010. Through price model and return model, this paper studies the relationship between net assets measured at fair value (and changes of fair value) and stock price (and returns on stocks). Empirical research shows the following main conclusions:firstly, net assets measured at fair value and changes of fair value are correlated with the stock price and returns on stocks, so on the whole, fair value accounting information has value relevance; secondly, differing from whether financial insurance and with times to work added test based on them, shows the further value relevance, and the influence of financial crisis on financial insurance is more than it on the others industries. At the last part of paper, according to the results of empirical studies, I put forward to the proposals of introducing some advice on how to effectively implement the fair value in our country.