Research On The Relevance Between The Fair Value And Enterprises Value

With the increasing changes of economic environment in the world, since the1970s, the international financial tools is a wave of innovation, the traditional ofhistorical cost accounting measurement can’t meet the needs of the development ofmarket economy, the fair value measurement model has been more attention, and inthe international standards were also widely advocated applications. On the Feb.15th,2006, the treasury department issued new accounting principal, which included manygreat changes in some important aspects, and one of the key points is the fair valueaccounting method. However, the reliability of the fair value has been questioned bythe banking and financial regulators, who are worried about the use of fair value willincrease the financial data quality and volatility risk, and will influence the stability ofthe financial system, so the application of the fair value measurement model is alsobeing questioned. Since the financial crisis happened, more and more research aboutthe fair value raise the question about whether it can reflect the accounting reportinformation and whether it should continue to application. The paper support the fairvalue of application in China, and combined with the application of the fair value incommercial Banks, The author analyze the correlation between the fair value and theEnterprise value.and at the same time, the author hopes that through this paperresearch the research of the fair value can provide some reference for the fair value ofthe mature application to make the contribution.In our country the study of fair value is the majority in normative research,which discusses the definition of the fair value, attribute and feasibility, etc. But inpractice, about whether the fair measurement model with the enterprise value isrelative, the research explores the relation between fair value measurement and shareprice or income index, which model choice is the price model and revenue model.This paper argues that, because the particularity of our country economy, the stockprices are often cannot reflect the enterprise accounting information, in order toreceive more direct research the correlation between fair value measurement andenterprise value, in this paper, after we choose the revised Tobin Q value as enterprise value measure, which used the16financial listed commercial Banks and the newstandard data of2008-2010as the research object in the empirical analysis method, inorder to provide data to support investors in the commercial bank to make decision.Decision based on this, in this paper, The author analyze the concept of the fairvalue and the fair value measurement, then introduces the connotation between thefair value measurement and enterprise value, and the present situation the fair valuemeasurement come into use of the commercial Banks in China and prospect of theapplication of the fair value, finally, this paper shows that the relevance between thefair value measurement and enterprise value through empirical analysis.