An Empirical Study:Impact Of The Earnings Predictability On Fair Value Measurement Of Chinese Listed Commercial Banks

We make the research about whether the extent to which fair values are used in financial reports is related to the ability of earnings to predict future cash flows and future earnings. For a sample of financial information of listed commercial banks in 2007 to2015, we use two comprehensive measures of exposure to build models and these two measures are calculated by balance sheet approach and income statement approach. The results display that increased exposure to fair value accounting in financial reporting enhance the ability of earnings to predict future cash flows.Existing domestic studies about fair values mostly are based on standardized research. These research mostly focus on the international convergence of CAS and the specific application and development tendency of fair value accounting. In addition,almost all of the prior research based on the empirical research focus on specific assets to measure fair value accounting and instead follow a more comprehensive approach to measuring fair value exposure. Besides, we use the latest financial information to carry out empirical study to make up the shortfall about the lack of the data. By doing so, this paper may be unique to timeliness.