A Research On Value Relevance Of Fair Value

As an important measurement attribute, the birth of fair value brought a great revolution to the field of accounting. And it has been a hot topic in accounting research at home and aboard since it was born. FASB and IASB constantly revised it in order to promote its development and application according to the change of market environment. There were many changes in our country over those years. For example, the capital market improved, people had a good knowledge of fair value, accountants’level of professional improved and so on. All those changes provided a good external environment to the development of fair value. At the beginning of 2014, the Ministry of Finance of our country made large change in this revision, one of the highlight was increasing a new criteria about fair value, which improved its status in the field of accounting. But scholars at home and abroad have different opinions on the promotion of fair value. So it is necessary for us to study the application of fair value in our country, which is good to the implementation of new criteria. And this paper is also to test the value relevance of fair value.This paper tests the value relevance of fair value by studying whether gains/loss-es on changes in fair value and available-for-sale financial assets’changes can affect share price. And the paper selects China’s A-share financial companies from 2010 to 2014 financial statement, organizes data by Excel, analysis data by SPSS 18.0, sets up model based on price model. Finally, the empirical results show that fair value information is related to share price; the value relevance of gains/losses on changes in fair value is higher than that of available-for-sale financial assets’changes; If gains/-losses on changes in fair value is less than zero, it may not have any effect on share price. On the contrary, if it is greater than zero, it can make a great effect on share price.The main contribution of the paper is to prove that fair value is of value relevance. In addition, it not only enriches the empirical research about the value relevance of fair value in our country, but also provides empirical data to support the implementation of the new criteria. Meanwhile it also puts forward some policy suggestions to promotion the perfect of criteria.