The evolution of fair value from a Chinese perspective： Concepts and related problems

On Jan. 1 st, 2007, Chinese public companies commenced the implementation of one basic and 38 specific accounting standards. A significant feature of these new standards is their focus on fair value （FV） and fair value measurement （FVM）. Company interviews and training sessions designed to promote understanding of the new accounting regime have revealed a number of problems relating to both theoretical understanding and practical application. This paper proceeds as follows. It commences with a discussion of the development of FV and FVM concepts by examining IAS 39, FAS 157, FAS 159 and CAS. There follows an analysis of the current status of FV and FVM theory and application. The paper concludes with an exploration of some related problems arising within the FV theoretical framework and its practical application.