The Study On The Incremental Information Content Of A Shares Under The Fair Value Measurement

To adapt to the situation that China has been a member of the World Trade Organization(WTO), and to coordinate and converge accounting rules of China and General Accepted Accounting Principle(GAAP), Department of Treasury released the new accounting standards on February15,2006, re-introducing the fair value measure mode. This new standards came into effect in the range of listed companies on January1,2007. One big highlight of the new accounting standards is that it treats fair value as one of the five accounting measure attributes, and there are17specific standards involved (to a varying degree) concerning fair value measurement. In the context of the financial crisis, whether the application of fair value can affect stock price, does its accounting information has incremental information content? This paper uses Dechow incremental information analysis thought to test listed companies’incremental information proportion in their revealed fair value information.This paper first analyzes and summarizes the correlation research about fair value at home and abroad, defines concepts about fair value and incremental information content, elaborates the theoretical basis of fair value measurement, and analyzes the application and impact of the fair value in the new accounting standards. Further, the paper uses the incremental information analysis of Dechow idea, using price model and regression analyze the data from2008to2010, judge whether the fair value measurement has incremental information content by the changes of the Goodness of Fit of the new model.The research results show that after implementing the new accounting standards, the fair value measurement information has incremental information content. These results can provide support in the view of empirical research to the standard makers, and will impel a widespread application to some extent. Meanwhile, the thesis presents the difference of R2between two models as a warning indicator of financial crisis, which provides a new indicator to predict the financial crisis, is conducive to make preventive measures in advance.