A Case Study Of Fair Value Measurement Of Investment Real Estate

With the deepening of the reform and opening up, china’s market economy has rapidly developed. The continuous improvement of the market economy makes the real estate market has entered a boom. The prosperity of the real estate market makes the real estate price being soaring and the current price is far more higher than its historical cost. So, the historical cost can not reflect its real value. The enterprise that use historical measurement can not reflect its financial information accurately, which can make the investors make wrong decisions.In order to accurately reflect the financial information of the enterprise, in February 2006,the ministry of finance issued new accounting standards for enterprises in our country, the third rule is specifically for the investment real estate, can be called CAS3 for short. CAS3 rules the subsequent measurement of investment real estate in our country usually use the historical cost measurement, when meet certain conditions, can also use fair value measurement. after four years of the release of CAS3, namely from 2007 to 2010, Statistics show that the number of listed companies in China which have investment real estate uses the fair value is 18, 22, 26, 30, account for 3%, 3%, 4%, 3%.Although the percentage is not so high, but the number is growing up. Therefore, it is very important to make further research in the reason of carrying out this measurement and its finance impact and the problem exist, which is also the starting point and purpose of writing this paper.This article uses the case analysis method. With the background of the use of fair value of the guanfujiayong company, this article starts with the reason of using the fair value, to the financial impact, then to the existing problems in the implementation of enterprise, finally to give opinion and the suggestion to improve enterprises for adopting fair value, which can give more reference for other enterprise.