Application Research On Fair Value

Fair value is the inevitable developing trend of accounting measurement attributes. In2006the ministry of finance issued the new accounting standard for business enterprises ".One of the bright spots of it is that it reintroduced the concept of fair value and it’smeasurement attributes, and also clarify the scope of the application of fair value, which notonly indicates that both the criterion formulation organization and the accounting circle inChina will not only hold evasive attitude to fair value, but also accelerated the integratingpace of our accounting standards with that of the international.From the first time when we adopted the new rules up to now, the fair value, with itsstronger correlation characteristics to accounting information, has gradually showed itssuperiority to the historical cost. But there are also some problems, such as: the incompleteenvironment of marketing economy, the gradual strengthening of the related policies, andpoor quality of the relevant personnel etc. All these problems lead to the randomness of thefair value, the increase of the space of professional judgment. In a word, fair value become thetools of profit drill. If we can not find good solution to these problems, it will limit the furtherapplication of fair value in our country; therefore, the research has important theoretical valueand practical significance.This article is divided into six chapters.The first chapter: introduction. The research paper begins with the introduction to theresearch background both abroad and at home, then it indicates the research purpose andsignificance, focusing on the review of present situation in domestic and foreign researchsystematically. Finally the author pointed out in this paper, the research ideas, researchmethods and innovation.The second chapter: the theoretical basis. The application of fair value is not only therequirement of comprehensive income concept, the requirement of the decision-makingconcept, but also the result of promotion of capital preservation theory. Theory of ModernProperty Ownership formed the theoretical basis for the measurement of fair value, at thesame time, the model transformation of asset pricing cleared the obstacles for the successfulapplication of fair value in our country.The third chapter: the history of the fair value application in our country. In this chapter,the author divided the history of the fair value application in our country into three stages: the starting of fair value stage, the avoidance of fair value and the restart of the fair valuestage. On the basic statement of the development situation, and characteristics of each stage,the paper mainly compare different rules in various stages of development in three aspects:debt restructuring, and non-monetary transactions investment.The fourth chapter: the present situation of the fair value application in our country. Thischapter is the focus of this article. This chapter studies the application of fair value researchtaking trading financial assets as an example. First of all, it starts from the SWOT analysis,make an overall analysis on the strengths, weaknesses, incentives, environmental threatanalysis, and build the SWOT matrix. then put forward. development suggestions. Secondly,the paper provides an empirical research on the development of tradable financial assets inour country. In the study, five typical listed companies are selected as samples, and westudied its application in standards promulgated after six years of development. Finally itpointed out the problems existing in the application of fair value accounting measurementattributes in our country.Chapter5: the perfection of the countermeasures of the fair value application. First of all,we should perfect the marketing conditions of the application of fair value, setting up aperfect marketing competition system. Second, We should build a system foundation for thefair value, including establishing and perfecting the relevant laws and regulations, preventingand curbing illegal behavior, establishing the fair value application specifications or operatingguidelines, improving fair value criteria system and the corporate governance structure,building a sound system of internal control, constructing the security system for reasonableaccess to and using of fair value measures etc. Finally it also discusses the problem ofstrengthening their professional skills and professional ethics training and improving the levelof practitioners practice aspects.Chapter6: research conclusion and prospect. By the study on application of fair valueproposition system, the research achievements at home and abroad, The author pointed out inthis paper, four research conclusions: the present situation of the application of fair value inour country at present is not fully active; fair value measurement attributes represents theadvanced concept of accounting; fair value measurement model will become the mainstreamof future accounting measurement model；in our country at present, the present situation ofthe application of fair value is modest and prudent. Finally, the paper points out theapplication of fair value in our country, pointed out trend of the future development.