Keywords: fair value; Listed companies; Financial statements; Accounting standards
1 The meaning and characteristics of fair value
The International Accounting Standards Committee (IASC) describes fair value as "the amount of assets exchanged or debts paid off voluntarily by parties familiar with the situation in a fair transaction". The Financial Accounting Standards Board (FASB) defines fair value as "the amount of current assets (or liabilities) purchased (or occurred) or sold (or settled) under the voluntary conditions of both parties to the transaction (excluding the circumstances of coercion or liquidation)". In the Accounting Standards for Business Enterprises-Basic Standards issued by the Ministry of Finance in 2006, fair value is defined as "under the measurement of fair value, assets and liabilities are measured according to the amount of assets exchange or debt settlement voluntarily carried out by both parties who are familiar with the situation in fair trade".
Although the definition of fair value is different in form, it is similar in essence. Judging from its meaning, the two parties who trade at fair value must be parties to unrelated transactions, otherwise the parties are likely to use fair value to manipulate corporate profits for them; Fair value transactions must be voluntary, and fair value will lose its meaning when forced transactions or assets are liquidated; Fair value must be familiar to both parties and be based on a perfect market environment and professional technical level. Therefore, when introducing the measurement attribute of fair value in China, three application levels of fair value are fully considered, that is, if there is an active market quotation (such as securities trading market), fair value is based on market quotation; If there is no active market quotation, refer to the recent transaction price or fair value of similar assets or liabilities; If the above two conditions are not met, professional valuation techniques will be used to determine the fair value.
There are five measurement attributes in China's current accounting standards: historical cost, replacement cost, net realizable value, present value and fair value. The measurement attribute of accounting requires that it can correctly reflect the correctness of accounting information, improve accounting quality and provide useful decision-making information for investors. Reliability and relevance are the most important accounting principles. Historical capital can reliably measure actual transactions or events. Historical cost is a past tense, which is suitable for initial measurement and amortization or depreciation in each period, but it cannot reflect the market price fluctuation of assets or liabilities, and it is difficult to meet the requirements of the principle of correlation. Based on market price information, fair value can reflect the influence of price, interest rate, exchange rate change and depreciation caused by scientific and technological progress on the value of assets and liabilities. It can be said that fair value is a dynamic reflection of the value of assets and liabilities. Fair value is sometimes not a single measurement model, it is based on other models. For example, when using valuation technology to measure fair value, discount methods such as present value of net realizable value often become the reference price for determining fair value. Therefore, fair value is a comprehensive measurement attribute of assets or liabilities based on the market.
Due to the outbreak of the financial crisis, the measurement of fair value has been questioned to varying degrees. Is fair value the chief culprit of the financial crisis or does the helper not do in-depth research? Analyze the application of fair value in accounting standards and its influence on financial statements.
2 Fair value of financial statements of listed companies
The application of fair value in China's newly promulgated accounting standards for business enterprises is mainly reflected in the recognition and measurement of financial instruments, investment real estate, exchange of non-monetary assets, asset impairment and debt restructuring. In the balance sheet and income statement, it is mainly reflected in goodwill, capital reserve, gains and losses from changes in fair value, non-operating income (expenditure) and asset impairment.
(1) The influence of fair value on the measurement of financial assets.
Fair value is widely used in the recognition and measurement of financial instruments. Because there is an active market quotation in the securities market, fair value measurement can enable users of financial statements to master the company's financial information and control risks, and can well reflect the impact of the market value of financial instruments on net profit or net assets. However, as financial instruments are classified according to different types, the specific impact will be different. Accounting Standards for Business Enterprises No.22-Recognition and Measurement of Financial Instruments stipulates that the gains or losses of financial assets or liabilities (except those related to hedging) measured at fair value and whose changes are included in the current profits and losses are included in the current profits and losses. Financial assets measured at fair value and whose changes are included in current profits and losses can be further divided into trading financial assets and financial assets designated as measured at fair value and whose changes are included in current profits and losses. Related transaction costs are determined as current profits and losses, and unrecovered cash dividends or bond interest included in the payment price are separately determined as accounts receivable. When selling or disposing of financial assets or financial liabilities, the difference between the fair value of the sale or disposal and the amount initially recognized shall be regarded as investment income; At the same time, the fair value changes during the adjustment period.