Research On The Value Relevance Of Fair Value In Financial Industry

The fundamental objective of financial reporting is the decision usefulness ofaccounting information. Reliability and relevance of accounting information is thepremise of accounting information useful for decision-making. But meet two charactersof information--reliability and relevance at the same time is very difficult, when itdeviation, sacrifice reliability and selection correlation become the current accountingstandards trend, the introduction of fair value measurement is a manifestation of thistrend. FASB and IASB on affirmation to the fair value, the main reasons are that the fairvalue can provide more relevant information than the historical cost, improve thedecision usefulness of accounting information. Fair value measurement was put intoaccounting standard since January1,2007, When fair value was attention, the UnitedStates sub-loan crisis triggered a global financial crisis, the financial crisis makes the fairvalue was greatly challenged. Whether the fair value conform China’s basic nationalconditions, Whether it increased the value relevance of accounting information, in thispaper, the financial sector listed companies as an example, research on value relevance offair value accounting information with empirical studies.In this paper, the study is divided into basic research, theoretical research, empiricalresearch, policy recommendations.Basic research primarily is the introduction, review interrelated literature on fairvalue accounting and value relevance of fair value accounting information. The researchon fair value in overseas basically in the mature stage. Discover that the use of fair valueenhance accounting information decision usefulness. The time of fair value’s applicationis short, Lack of relevant data to support. Find that compared with the historical costaccounting information, relevance of fair value accounting information is more valuable.The theoretical part is divided into four sections. First, this paper described theconcepts and applications of fair value. Based on the definition of fair value in China’saccounting standards, established the concept in this paper. This paper analyzedapplication status of fair value in china. Then, clear the value relevance of the study isbased on the criteria specified angle, which is different from the Relevance of accounting information, it is another concept. Final, this paper described the relevant theoreticalbasis, Including the market effective field hypothesis theory, decision-making usefultheory, and net surplus theory.The empirical research includes the design of study and tests of empirical. In thedesign section of this paper, it selected listed companies in the financial industry as theresearch object. This paper chooses Price model and revenue model and analyzes the data,including descriptive statistics, correlation analysis and regression analysis. The resultsshowed that Changes in fair values per share and Changes of available-for-sale financialassets per share have Value relevance and they negatively correlated with the stock price.Based on the research conclusion, and in response to the status of the application offair value, this paper put forward policy suggestions: There is no active capital marketconditions, improving and perfecting the fair value measurement relating to accountingpolicy; Further standardize the valuation techniques and management system; Perfectuncertain information flawed approach and content.