Abstract
In 2006, the Ministry of Finance of China issued the CAS3 accounting standard, introducing the fair value measurement model into the measurement of real estate investment. However, by the end of 2021, A-share listed companies that changed their cost measurement model of real estate investment to the measurement model of fair value accounted for a very small proportion of all A-share listed companies holding real estate investment in China. This paper selects China Fortune Land Development Co., Ltd. (CFLD), a representative company, as the case object, and studies its motivation of changing the measurement model of real estate investment in 2018 from three aspects: earnings management, profits of major shareholders, and compensation management of senior managers, and analysis of economic consequences from both short-term and long-term perspectives. It is expected to provide references for stakeholders to correctly interpret the disclosed fair value information of real estate companies and for relevant listed companies to reasonably adopt the fair value measurement model.
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