The Choice and Reason Analysis of Measurement Model of Investment Real Estate in China

Pursuant to the provisions in Accounting Standard for Business Enterprises No. 3 - Investment Property (CAS3) issued on February 27, 2006 by the Ministry of Finance, China’s investment real estate follow-up measurement method can choose the cost model or the fair value model. But after investigation we found that, currently, only less than 5% of the enterprises with investment real estate projects in Shanghai and Shenzhen used a fair value model in the follow-up measurement. Therefore, in view of this phenomenon, this paper analyzes the factors influencing the fair value measurement model of investment real estate.