Does Fair Value have Incremental Information Content:Evidence from Chinese Listed Companies

This paper examines the value relevance of the fair value of financial instruments by tradable financial assets (short-term investments) and available-for-sale financial assets and information con- tent differences between measurement on-balance-sheet items and disclosure off-balance-sheet items under new accounting standards.The evidences suggest that fair value of disclosure off-balance-sheet i- tems,as well as measurement on-balance-sheet items,has strong incremental explanatory power over and above their historical cost values in the historical cost financial statements.In addition,we find that fair value of available-for-sale financial assets has not incremental information over and above their his- torical cost.Further comparison analysis suggests that fair value of measurement on-balance-sheet i- tems has more incremental information than fair value of disclosure off-balance-sheet items.