Research On The Value Relevance Of Investment Real Estate Measured In Fair Value

The first listed company which measures investment-oriented real estate with fair value measurement mode appeared in China since the issuance of Accounting Standards for Enterprise No.22—Recognition and measurement of Financial Instruments by the Ministry of Finance of China in 2006. And the position of fair value measure property in Chinese accounting has become increasingly important along with the issuance of Fair Value Measurement(draft for soliciting opinions) in 2012 and Accounting Standards for Enterprise No.39—Fair Value Measurement in 2014 by the Ministry of Finance of China.The discussion about the correlation of the fair value measurement has long been a very popular topic in the related study field at home and abroad, and currently there is still not an agreement with regard to the correlation of the fair value measurement. Because the requirements for investment-oriented real estate to use fair value measurement property are relatively harsh, although the number of the investment-oriented real estate listed companies which adopt the fair value measurement mode has increased every year, the proportion of the overall number is still small. There are not many research subjects carrying out correlation of the fair value measurement in the field of investment-oriented real estates, but it is necessary.This paper takes the listed companies of Shanghai and Shenzhen which use fair value measurement property to measure investment-oriented real estate from 2007 to 2014 as the sample companies. Based on the theory of decision-making relevant view and economic income view, it proposes a hypothesis, and then on the basis of Ohlson price model, it designs corresponding price model and income model for empirical research. The result of empirical analysis shows that the listed companies which use the fair value measurement to measure investment-oriented real estate are able to provide more relevant financial accounting information, and the changes of the fair value and public value of investment-oriented real estate are positively correlated with the stock price. Finally, this paper proposes relevant recommendations for the more standard application of fair value measurement property in China.