Abstract

The explosion of financial crisis induced an argument about the accounting of fair value in the whole world, and the influence of the fair value measurement on the bank profit begun to be noticed by the public. In the background that Chinese commercial banks successively implemented the shareholding reform and begun to come into the market, it is practical and meaningful to analyze the influence of the fair value measurement on the income volatility of listed banks. The relationship between the fair value and the income volatility can be found by the empirical study of the income volatility of listed banks of China. The research result shows that the income volatility induced by the fair value significantly exceeds the results of the historical cost mode and the mixed measurement mode, and the interior volatility of economy is the main cause of the net income volatility of listed banks in China.

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