Information Transparency,Fair Value Measurement And Debt Contract

Accounting information is one of the important bases for banks to examine the process of corporate credit granting.Companies with better profitability,higher operating capacity,and stronger liquidity are more likely to attract bank debt financing.However,there are obvious information asymmetries in the debtors and creditors on the market,and there are differences in information transparency.The debtor understands the internal situation and prospects of the enterprise more clearly than the creditors,and holds more inside information about the investment projects of the company.That is,there is a difference in the information environment faced by creditors and debtors.In order to conceal bad assets and bad information,the debtor's company may whitewash the financial statements in order to achieve the purpose of obtaining high loans.The creditor's bank will employ various intermediary agencies to analyze the debtor's company's real information in order to reduce information asymmetry..Therefore,information transparency will have a certain impact on the company's debt contract.With other control variables being the same,banks are more willing to lend to companies with higher information transparency at lower interest rates and higher rates.If the contractual conglomerate theory is used to analyze the enterprise,a sufficient and necessary condition for the existence of the enterprise is that the stakeholders provide the various resources required by the enterprise through the contract and share the corresponding results.Specific to the debt contract,it refers to a loan contract agreement reached by the debtor company and the creditor bank based on their respective interest requirements.Enterprises use debt to meet their capital needs for investment activities and business activities,and banks issue corporate loans for interest income.A very important feature of the contract is fairness and fairness.When the creditor bank and the company enter into a debt contract,they will fully examine the authenticity and relevance of the accounting information disclosed by the debtor company.In the formation of corporate accounting information,the choice of accounting measurement attributes will affect the final result of the financial report.Fair value measurement depends on the market transaction prices of the buyers and sellers at the point in time of the transaction and is the price information closest to the actual value of the company' s assets and liabilities.This kind of price information not only helps to accurately reflect the current operating results of the company,but also helps to predict the future cash flow created by the company,so that it can guide stakeholders to make correct economic decisions.Therefore,the fair value measurement attribute affects the quality of accounting information and will inevitably have an important impact on the company's signing of the debt contract.This article takes the listed A-share companies with non-zero profit and loss(or other comprehensive income)changes in fair value in 2010-2016 annual reports of Shanghai and Shenzhen cities as the research object,and proceeds from the perspective of information transparency to analyze information transparency and fair value in-depth.The relationship between measurement and corporate debt contract.The paper first examines the impact of information transparency on corporate debt contracts(specifically including the total debt size,long-term debt size,and short-term debt size),and then explores whether fair value measurement has an impact on corporate debt contracts.On this basis,to further distinguish between different information transparency,the impact of fair value accounting information on the long-term and short-term debt of listed companies is different.The main findings are as follows:(1)Information transparency affects the scale of corporate debt.The empirical results show that there is a significant positive correlation between the transparency of listed company information and the total debt scale of the company.The better the information environment and the higher the transparency of information,the greater the loan scale provided by creditor banks.When the degree of information asymmetry is large,creditor banks face greater credit risk when signing a debt contract,and are more inclined to provide smaller-scale loans for enterprises.Compared with the scale of long-term debt,information transparency has a stronger positive effect on the short-term debt of listed companies.Long-term borrowings have a long period of time and there is great uncertainty in the recovery of principal and interest.Relative to long-term loans,bank short-term loans are subject to less risk.Therefore,in the presence of information asymmetry,banks are more willing to lend short-term loans to avoid the greater risk posed by long-term loans.(2)Fair value measurement affects the scale of corporate debt.The empirical results show that there is a positive correlation between the total debt size of listed companies and the fair value accounting information.Compared with the size of short-term debt,the fair value accounting information included in the current profit and loss is more relevant to the long-term debt size of the company.For short-term borrowings,since the fair value changes included in the current profits and losses are unrealized profits and losses of the company,the creditors may not attach importance to the fair value accounting information that causes changes in accounting profits.For long-term borrowings,due to the longer loan term and greater uncertainty in future operations,the follow-up profitability of the company has become the bank's focus.The change in fair value included in the current profit and loss is an important accounting item in the company's profit statement,which will affect the bank's expectation of the company's future profitability and cash flow acquisition ability.(3)Information transparency affects the correlation between the fair value measurement and debt contract of listed companies.When the information transparency is poor,good information transparency can promote the positive relationship between fair value accounting information and the overall debt size of the company.And with high transparency of information,fair value accounting information is more relevant to the scale of long-term debt.Fair value measurement has improved the authenticity of accounting information to a certain extent,more fairly demonstrated the company's operating results,financial status,cash flow and other information,to some extent eased the debt risk due to information asymmetry between the two parties to the contract..Therefore,when the transparency of information is high,the correlation between fair value accounting information and debt contract is stronger.