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Based on China’s national conditions and to be geared to international standards,Accounting Standards for Business Enterprises No.3-investment real estate allowsconditionally adopted the fair value measurement model for subsequent measurement ofinvestment real estate, in order to improve the quality of accounting information about it.However, five years after the implementation of the new standards, most of the enterprises arestill using the cost model to measure investment property, few enterprises measured at fairvalue, a far cry from expectation. This phenomenon shows that there are a series ofdifficulties and restrictions in actual of new guidelines. To study this economic phenomenon,and analyses its causes, explore the issues behind, and to find a reasonable solution, areneeded to be solved by our accounting theory and practice community.This article is based on investment real estate accounting standards and fair value theory,and takes SANMU Group as an example, whose investment property measurement changesfrom cost model to fair value model. After introducing the condition about SANMU Groupand the group’s investment real estates, the paper discusses about the cost measurement modeland its problems, and then explores the reasons, process, and financial impact of the change.The paper focuses on the financial impact and makes a conclusion of the pros and cons ofchanging the measurement of investment real estates as fair value model. SANMU Groupcase analysis, combined with the problems found in the analysis of the process, the end of thisarticle, suggesting some proposal, from the management decision-making, governmentregulators and theoretical research recommendations perspective, on how to promote theinvestment property to use fair value measurement model in future, which will be of greatpractical significance when introducing and promoting fair value measurement in a lot ofindustry.
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