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The Impact of Fair Value Measurement on Stakeholders

Under the background of current economic environment, the historical cost accounting information has been increasing difficult to meet the decision-making related demand by information users. The use of fair value measurement has become an
Submitted On: 04-01-2010 | Views:	Article Tools:

Under the background of current economic environment, the historical cost accounting information has been increasing difficult to meet the decision-making related demand by information users. The use of fair value measurement has become an inevitable trend. However, as related valuation technology and maturity market environment needed in fair value measurement, problems and limitation still exists in the application of fair value in practice. The enterprise can be considered as a group of contracts signed among stakeholders for certain purpose. Changing to fair value measurement will have an impact on the realization and distribution of stakeholders' interest. Stakeholders will also conduct a direct impact on accounting at the same time. Based on above-mentioned, the paper analysis the impact of fair value measurement on stakeholders, in order to provide improving suggestions on fair value measurement from the perspective of stakeholders.The paper uses normal research as main research methods. At first, the paper introduces the definition, theoretical foundation and the application in accounting standards of fair value measurement. It also applies the concept of stakeholders to the research. Through analyzing the economic consequences of accounting measurement, the paper establishes the mutual influence between accounting measurement and stakeholders. And then it discusses the impact of fair value measurement on major stakeholders such as investors, creditors, business executives, government, and intermediary. On the basis of analysis, the paper also discusses the necessity and possibility of promoting the fair value measurement by stakeholder. Finally, the paper provides specific suggestions on it.The main contributions of this article include the following: First, through establishing the connection between fair value measurement and stakeholders, the paper analysis the impact of fair value measurement on stakeholders systematically and provides the improving suggestion on fair value measurement from the perspective of stakeholders. Second, it provides the perspective of stakeholders in analyzing accounting standards. Through specific analysis with new enterprise accounting standards in research, the standards setting organization will be familiar with the likely impact on different market participants by new accounting criteria, which is benefit for the response in the formulation of standards and the improvement standards related to fair value measurement.

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