Research On The Relationship Between Fair Value Measurement,Securities Investment Income And Earnings Management

In the market economy,the market price is dynamic,which can be divided into the past,the present and the future.The past market price is the historical cost,which is the traditional measurement attribute of financial accounting.Reliability is the main advantage of historical cost.Historical cost not only has the original certificate which can be checked,but also save a large amount of costs of information reprocessing,which is in accordance with the essential functions of accounting--reflect the truth,and avoid the subjective estimation and judgment.However,the limitations of the historical costs should not be ignored:(1)it only reflects the input information without output data,and lack of decision usefulness;(2)the historical cost is not associated with the current market price,and affect the relevance of accounting information;(3)changes in the historical cost at different times are amortization and distribution of the known data,it can not reflect the uncertainty during the assets holding period.As the decision usefulness of accounting information has gradually become the consensus view,Douglas publicly suggested financial institutions should report financial incestment in accordance with the market price since 1990,thereafter,fair value gradually rise as a measurement attribute to make up for the defects of historical cost and future oriented.Since fair value is necessarily remeasured on each balance sheet date,it has a higher decision relevance.China issued the "Accounting Standards for Enterprises No.thirty-ninth--the Fair Value Measurement" in 2014(hereinafter referred to as CAS 39).The new accounting standards revised the definition of fair value,and assumed that the transaction is existed.The new accouting standard based on the perspective of the market,define fair value as exit price and expanded the scope of application of fair value,since then,China entered the stage of "normative application" of the fair value.While the China is undergoing a bull market which reached the peak of financial history.The huge profits of stock market attract listed companies continue to participate as investors.Especially in the situation of China's economic slowdown,listed companies can not rely on the main business to obtain high profits,especially for losses or imminent losses of listed companies,which are relying on the main business profit has no hope of reversing losses in the short term.Markets built on gains,while investment income are high profitable,controllable and predictable.Therefore,listed companies pay more attention to securities investment income to improve profits,especially the *ST companies.Based on the above market and institutional background,this paper is mainly about �The relationship between fair value measurement attributes and earnings management of securities investment income�.Research the annual report index of A share Listed Company from 2014 to 2015,adopt the multiple linear regression model as the researching tool,examine after the promulgation of CAS 39 whether the profit and loss of available for sale financial assets measured by fair value of listed companies have incremental value relevance,and whether its unique accounting treatment mode provides earnings management space for enterprise managers in turn.This study can evaluate the significance and effectiveness of the implementation of the new guidelines,make up the deficiencies of the existing literature in China,and put forward reasonable suggestions.The empirical results show that the fair value changes of available for sale financial assets measured by fair value have incremental value relevance.Meanwhile,the paper analyzes the behavior of earnings management using the fair value in listed companies in China,which is widespread,more common in *ST companies.The implementation of the new standards CAS 39 showed some effect,but the fair value measurement model in the development of our country still has a long way to go.This article explores the value relevance and earnings management of fair value measurement attributes,which has certain effectiveness and pertinence can provide theoretical basis for fair value application and promotion in China.Hope that the conclusions and recommendations can provide support for fair value application and improvement.