The Influence Of Disclosing Fair Value Hierarchy Information Normatively On Value Relevance

The fair value is the most relevant measurement attribute of financial instruments,especially derivative financial instruments,but its reliability is often questioned.As the fair value measurement to a certain extent depends on the management of the subjective judgments and choices,it leaves a lot of free space to manipulate.However,in recent years,GAAP has been pursuing the application of fair value measurement attributes.China introduced the fair value measurement attribute in 2006,and promulgated the "Fair Value Measurements" in 2014.It has also been committed to the implementation of the fair value measurement attribute and tries to solve the unreliable problem caused by the subjective judgment.The new guidelines promulgated in 2014 redefined the notion of fair value,and more clearly delineated the three levels of fair value,taking into account the reliability problems associated with fair value measurement errors,which allow users to assess the reliability of fair value measurement.And more information disclosure can effectively help investors to judge,for which the guidelines develop a clearer specific requirement,especially for the disclosure of third-level unobservable input values.The guidelines require companies to provide more information,which reduce the information asymmetry between investors and companies to a certain extent,making the measurement of fair value more transparent and helping to improve the usefulness of financial decision-making.Based on the promulgation of the "Fair Value Measurements" in 2014,this paper studies the value relevance of fair value information from the perspective of information disclosure.This paper consists of six sections.The first one is the introduction.This part introduces the background and significance of the topic,and combs and reviews literature on the value relevance of the fair value information at home and abroad.Then I put forward the research frame and research method of this paper and explain the innovation.The second part is the concept of definition and theoretical basis.This part first defines the fair value level,the value relevance and the fair value hierarchy information disclosure,and clarifies the scope of this paper.And then the relevant theories have been described and explained,consisting of the effective market hypothesis,information asymmetry theory and accounting objectives theory.The third part is theoretical analysis and research hypothesis.This part is based on the concrete theoretical analysis.The existing research results are supplemented and elaborated,and then the four hypotheses of this paper are put forward.The fourth part is research design.Through the summary of previous research literatures,this part first elaborates the reasons for the selection of the industry,and then describes the specific sample screening process and data sources.Then,the empirical model is designed with reference to relevant literature at home and abroad,and the meaning and calculation method of variables are expounded.The fifth part is the empirical test and the results analysis.This section begins with annual statistics on the distribution of samples,and it can be seen that companies with disclosure of fair value information are increasing year by year.Then,the general descriptive statistics of the main variables involved in the model are analyzed,and the variables are understood.The differences between the groups are found based on whether or not the standard information of the fair value is disclosed.Finally,the empirical results are obtained by the multiple regression analysis of the empirical model and the relevant robustness test is carried out.The sixth part is conclusions and recommendations.This part summarizes the theoretical analysis and empirical analysis of the full text.Then,it points out the shortcomings and the areas that need to be improved.Based on the theoretical analysis and empirical test,it is found that the fair value information has a value correlation as a whole.The value relevance of assets measured at the first,second and third levels decreases gradually with the decrease of the measurement level.And the value dependence of the first,second and third levels of liabilities measured at fair value is not significantly different.The value relevance of the fair value information at different levels of disclosure is further studied.It shows that the specification disclosure of the fair value information can significantly improve the value relevance of the third level.This paper provides direct empirical evidence about the China Enterprise Accounting Standards No.39"Fair Value Measurements".The innovations of this paper are as follows:Firstly,previous studies have used fair value gains and losses as research variables,but in this paper,I choose the fair value information of different levels as the variables,and study the value relevance of the information at all levels which provide more direct empirical data.Secondly,this article examines the impact of fair value information disclosure on value relevance.The promulgation of the "Fair Value Measurements" criterion in 2014 not only requires the enterprise to disclose the information of the fair value level,but also makes more disclosure requirements for the second and third levels of measurement.This paper examines its impact on value relevance,and provides a new perspective for the study of fair value.