The Research On Fair Value Measurement In Inactive Market

Fair value measurement issue in inactive market currently is an internationalforefront issue and also an urgent vital theory and practice issue in currentinternational politic, economy and accounting field. The outbreak of global financialcrisis in the second half of2008makes it urgent to research fair value measurementissue in inactive market. FASB and IASB have gained great research achievements forthat. Countries around the world are trying to set up a unified global high quality ofaccounting standards. Our country is also trying to realize our accounting standards’comprehensive continuous convergence with International Financial ReportingStandards, including researches on fair value measurement issue in inactive market.This paper systematically summarized the latest research achievements thatFASB and IASB have gained for fair value measurement issue in inactive market. Ithas analyzed challenges that fair value measurement in inactive market has faced,such as uncertainty and complexity of financial market, lack of perfect fair valuemeasurement in inactive market, insufficient financial market supervision,comprehensive quality of accounting personnel to be raised and so on. The key of thispaper is to focus on issues of fair value measurement in inactive market. This paperdefines inactive market, analyses the connotation and extension of inactive market,clarifies the relationship of active market and inactive market and expounds basicissues of fair value measurement in inactive market, such as application and scope offair value in inactive market, the election of inputs, valuation model and measurementmethods in inactive market, determining fair value in inactive market. The paperexpounds how to improve the faithfully reflection of fair value measurement ininactive market from the internal and external aspects of fair value measurement,which gives inspiration and suggestions to our China.Fair value measurement in inactive market is an indispensable and vital part offair value accounting. This paper provides reference for international accountingorganizations in theory so that they can formulate unified fair value measurementstandards and helps our China set separate <Accounting Standards ofEnterprises—Fair Value Measurement> standards practically.