Research On Fair Value Model In The Application Of Investment Property

For a long period of time, historical cost Occupy the dominant position of measurement because of its reliability. With the development of economy, historical cost which is based on the past cannot adapt to the change of economic environment, fair value arises at the historic moment. As a measurement attributes facing future, fair value got the favor of people and it was used more and more widely.In order to provide higher quality information and convergence with international accounting standards, Ministry of Finance issued new accounting standards for enterprises in2006, and adopted fair value measurement model in some accounting standards including the standard of investment property. The accounting standard demands that fair value can be used in the measurement after recognition unless meeting some qualification. When the standard has just introduced, the industry forecasted that most listed companies would adopt fair value measurement model. Today, the market of real estate is on the rise, the use of fair value measurement model have positive effects on the financial conditions and business performance. But seven years have passed, only a few companies adopted fair value measurement model according to my statistics. What is the application of fair value model in investment property in China? Are there any problems in the application of fair value model? Why most listed companies do not want to adopt fair value model? How to improve the standards of the investment property? They are the significance and purpose of this article.This article first study standards of the investment property which can lay a theoretical foundation for later analysis; Then mainly study the application of fair value model in investment property, the study combined with the latest statistical data to analyze the overall application status of fair value model in investment property. According to the current application, the article points out some problems existing in the current fair value model application. Then study the phenomenon of listed companies that use fair value for earnings management and what factors are important when listed companies choose measurement model, these study will combine with cases. In the end, the article puts forward suggestions according to the earlier studies.