Fair Value and Historical Cost Analysis on the Impact of Accounting

Financial accounting,the use of historical cost of assets is an important measurement of the basic principles of historical cost measurement model become the dominant mode of accounting measurement.In China,the accounting measurement has been guided by the principle of historical cost.Ministry of Finance on February 15,2006 issued by China's latest Enterprise Accounting Standards,one of the most striking change is the fair value measurement model widely used.Historical cost and the fair value of the background and basic theory and historical cost and fair value of the development process to see,historical cost and fair value measurement model has its own advantages and problems.From the development trend,the historical cost measurement model will be a long time,mainly in the fair value measurement under the premise will be the coexistence of various measuring properties,but its important role will become more prominent.This article will focus on how to ensure fair value in the process of implementing the new guidelines can be properly used.This article will define two measures and their property from the goals and accounting principles and accounting links,etc.aspects were compared.By comparison,this paper compared to that of historical cost measurement,fair value reflects the essence of things better reflect the assets and other accounting factors inherent characteristics;compared to historical cost.Fair value accounting to better meet the goal-making a useful concept needs;compared to historical cost,fair value accounting information more in line with quality requirements.