Fair Value Measurement and Earnings Management in China's Real Estate Listed Companies

With the rapid development of China's economic environment and the improvement of the capital market, the fair value measurement model has become a product of social and economic development. In 2006, the Chinese Ministry of Finance issued a new accounting standards system, reintroducing the fair value measurement model. Currently, fair value is widely applied in various standards and is becoming increasingly common in practical operations, indicating the importance and necessity of fair value. However, the behavior of listed companies using fair value models for earnings management is also becoming more common. Although the use of fair value to some extent suppresses the behavior of listed companies' earnings management, this behavior still exists, which poses a certain potential risk to the healthy development of the capital market. Therefore, studying the relationship between the application of fair value and earnings management is of great significance for promoting the healthy development of the capital market and safeguarding the interests of investors. At the same time, we also need to strengthen our understanding and application of the fair value measurement model to ensure its effectiveness and fairness in the capital market. In this trend, this article selects the real estate industry as the research object, aiming to explore the earnings management behavior of real estate listed companies under fair value measurement in detail.

Based on previous research, this article conducts empirical research on earnings management of listed companies under fair value measurement. First, it elaborates on the relevant theories of fair value measurement model and earnings management, and summarizes the research on earnings management and fair value at home and abroad, as well as their relationship. Secondly, it analyzes in depth the impact of the specific application of fair value on earnings management. Then, explanatory variables, explained variables, and control variables are selected to conduct empirical research on the earnings management behavior of listed companies in China. This study is based on the modified Jones model and uses stata15.0 statistical software to conduct descriptive statistical analysis, correlation statistical analysis, and regression analysis on the data of real estate listed companies from 2018 to 2021, to verify whether the hypothesis is established. The research results are as follows: ① There is a significant positive correlation between fair value changes in profit and loss and the level of earnings management of listed companies. ② There is a significant positive correlation between investment income and the level of earnings management of listed companies. ③ There is a significant negative correlation between asset impairment losses and the level of earnings management of listed companies. ④ There is a significant positive correlation between non-operating income and the level of earnings management of listed companies. Finally, this article puts forward targeted and operable countermeasures and suggestions.