Research On Contract Motivation Of Fair Value Measurement

Generated and applied to the accounting practices from the eighties of lastcentury, fair value has caused the widespread concern and it has been the hot anddifficult research question. In the western developed countries, due to the wealth ofinvestors is mainly reflected in the prices of the securities, which le ads to thevaluation usefulness of fair value is the most concerned areas of the accountingscholars,and achievements of this research is innumerable. But in our country, theeconomy system is transforming, the existence of unclear property rights,not-standard capital market and the high proportion of unfair trade makes it possibleto achieve a breakthrough on the study of fair value,from the contract perspective.From the perspective of enterprise contract theory,this paper briefly discusses thehelp of the enterprise contracts in the evolution of fair value firstly.Then focus on theinfluence of enterprise contracts in the application of fair value measurement,andindicate that the different composition of contracts make a different influence on theapplication of fair value measurement.Finally,this paper arrives to the China’s specificnational condition. On the basis of reviewing the course and the application status offair value in our accounting standards,this paper analyzes the impact of China’sspecial contractual environment on the application of fair value measurement indetail.Based on this,it proposes the research hypothesis.Taking into account the sizeof sample,this paper selects the classification of financial assets of listed companiesas the research object.Though the methods of cross-validation and multiple linearregression,it tests the contracts motivation of the fair value measurement applicationand the main conclusions are as below:The sample companies are more likely to choose the conservative accountingpolicy, when their natures of stock right are state-owned,their managements areholding shares,their asset-liability ratio are high,their size of assets are large and theirauditors belong to four big international accounting firms.So these companies aremore inclined to hold the available-for-sale financial when they classify theirfinancial assets.This conclusions prove that the equity contract,the paymentcontract,the debt contract,the government control contract and the audit contract havean impact on the classification of financial assets in our listed companies.It alsoindicates that these contracts could affect the use of fair value measurement.