Fair value measurement has always been one of the most challenging issues in the international accounting theory front in recent decades. Because fair value measurement can provide investors with information highly related to the reality, it can help investors to make right decisions. Now it becomes one of the accepted accounting measurement attributes in the developed countries. China's Ministry of Finance issued new accounting standards systems in 2006, which was the first time to clearly put forward the definition - fair value measurement. Many specific criteria concerning the measurement of accounting elements are using fair value measurement in varying degrees, which is in line with the international accounting trends, and also adapted to the objective demand of China's economic development. China's new accounting standards fully reflect the convergence with the International standards, while it has its own characteristics which consider more about the real situation in China. In the new "Enterprise Accounting Standards Basic Standards", fair value has the same status with others rather than regarding it as a composite property. China makes it clear that when enterprises measure their accounting elements, they usually adopt historical cost measurement; if choosing replacement cost, net realizable value, present value and fair value measurement, they should assure that the identified account of accounting elements can be obtained and reliable in measurement. Only when historical cost is obviously unreasonable should we consider fair value, which reflects the dominant role of historical cost and non-dominant role of fair value. The application of fair value will be beneficial to the perfection and development of capital market. This essay will offer a specific analysis of the application of fair value measurement under China's new accounting standards.
