The correlation between fair value and total profit of public company

The traditional measurement attribute has substituted by fair value under the new accounting standards. There is an impact on the profits of public company. We carry on a empirical analysis through the selection of 92 samples from some public companies, the correlation coefficient r =− 0.725 **, the result is that change of fair value have a strong negative correlation with total profit. That is why most companies do not want to use fair value. Due to use of fair value the accounting information is more true and accurate. Lastly, it makes recommendations that develop accounting system in china.