An Empirical Research on the Relevance of Fair Value

Research on the fair value is always the key problem and also the crucial problem of the world accounting research, especially in the financial crisis. This paper provides data support for the empirical research of the relevance of fair value in China. By analyzing the financial data of listed commercial banks in China in 2006 and 2007 through an empirical method, the changes of explanation of book value per share and earnings per share to share price before and after the application of fair value are compared. The results show that earnings per share under fair value measurement have incremental explanatory power to stock prices. That is, the economic effect of fair value is positive.