Research On Theories And Methods Of Fair Value Accounting Estimate

The core of accounting is measurement. Fair value measurement has become themost important component of accounting measurement of21st century. Accountingmeasurement includes accurate measurement and inaccurate measurement(accounting estimate). Estimate is an inherent part of accounting. With the increasingamount of risks and uncertainties in accounting environment, the proportion ofaccounting estimate is growing, since fair value accounting estimate can represent therisks and uncertainties faithfully, fair value accounting estimate is playing anincreasingly significant role in contemporary accounting measurement. FASB, IASBand the ministry of finance of China has promulgated the standard of fair valuemeasurement, which provides references to relevant practice.This paper emphasizes the inaccurate measurement part of fair value accounting(accounting estimate), it discusses the concepts, theoretical basis, methods andapplication problems of fair value accounting estimate, and concludes that fair valueaccounting estimate has great theoretical significance; the key issue is to make agood use of fair value accounting estimate; as long as following reasonable methods,fair value accounting estimate is no longer a challenge; although there are someblocks in the application of fair value accounting estimate, the application has thenecessity and feasibility, and it can be improved from several aspects, such as settingup related concepts and so on.There are two innovation points of this paper, firstly, the selected topic is up-to-date, secondly, this paper draws the degree of “Faithful Representation” curve of fairvalue accounting estimate when valuation techniques are appropriately used. Thisstudy will provide references to the researches of accounting estimate including fairvalue accounting estimate, fair value and related accounting standards, it will alsoprovide guides for related practice, thus promoting the overall application of fairvalue and enhancing the quality of useful financial information.