Research On AV Realty Management Based On Fair Value Measurement

Historical cost accounting has been used as the basis of accounting since the introduction ofaccounting to China. In1998, the fair value accounting measurement mode was introduced toChina, since then the fair value has been on the concern. The development experience of fairvalue in China is tortuous, almost was canceled since being put into use and once again beenintroduced to China with the development of the market economy. In2006, the fair valuemeasurement was re-proposed formally in the "Enterprise Accounting Standards", and finally in2014Ministry of Finance issued "Accounting Standards for Enterprises No.39-Fair ValueMeasurements", the fair value became a new member of the corporate accounting standardssystem. It can be seen through the development of fair value, the fair value has been morerecognized and widely adopted by corporates.With the continuous development of market economy, the use of fair value caused moreheated disagreement in the theorists and practitioners. Some argued that the use of fair value canmake the correlation of financial statements be better manifested; the other thought fair value canprovide favorable condition for enterprises to manipulate profits. Through the index systemdesign of earnings management, which can help information users to be more aware of earningsmanagement tools of listed companies and help investors to make the right judgements of thevalue of company so that right investment decisions can be made.This paper summarizes the relevant literatures on the fair value and earnings management andwe acknowledged the current extent of study by domestic and foreign scholars. Then elaboratetheories about the fair value and earnings management, lay the theoretical basis for constructionand analysis of the index system below.In this paper, the Zhonghang real estate is used as a case,major corporate financial data is presented to provide a general understanding of the company’sbusiness conditions. Then build earnings management index system related to fair value,including the overall index and the index for the fair value.Combined relevant financial data tocalculated and then calculate results of the detailed analysis of each indicator.The results show that: the Zhonghang real estate to some extent has the predisposition towardsthe use of the fair value to manage earnings. Finally, according to the results of the case study inthe Zhonghang real estate, relevant policy recommendations are made as follows: improving corporate accounting standards and the the application of fair value, the full disclosure ofcorporate financial statements, the establishment of professional asset evaluation system andstrengthening the capacity of external supervision.