Stock Market Asset Assessment Study

Asset appraisal is a product of commercial economy, and its development links closelyto the growth of the market economy. In the development of socialist market economy in China, asset appraisal plays a fundamental role in the securities market. This paper takes the asset appraisal as a topic, focuses on asset appraisal of companies seeking a new listing (initial public offering companies, or IPO companies), starts with an international comparison of asset appraisal, (I15cUSSCS issues of asset appraisal in the securities market in four aspects by means of a combination of the normative and positive research methods, aims to lay down a method to determine accurately whether or not the result of an asset appraisal is overstated or understated, and summarizes and analyzes one particular method of asset appraisal - tile present value of future earnings, which is a hot topic of the security markets. The paper is (livided to live chapters, and the main content and views are summarized as follows:Chapter 1 International Research on Asset Appraisal. In this Chapter, theauthor reviews the macro environment behind asset al)Praisal, points out the ftindanieiital factors affecting the development of asset appraisal, which include the economic system, legal environment an(I market environment. The author selects England, the United States and South Korea as representatives of two main systems of international appraisal sectors to conduct comparative studies on their history and current status, and performs an international comparison on accounting treatments relating to asset appraisal using North America and Australia as representatives.Chapter 2 The Analysis of Asset Appraisal of IPO Companies in China. In thisChapter, the author briefly tracks back the development of the asset appraisal laws and regulations, asset appraisal institutions, etc., and summarizes and analyzes in three stages the status of asset appraisal of I P0 companies in the past ten ~'ears. Among them, the author place particular emphasis on the status of appraisal surplus rate, appraisal methods, and information disclosure of the 103 companies listed in the year 2000.Chapter 3 Positive Research of Asset Appraisal of IPO Companies (partone)- Examination of Systematic Overvaluation. In this Chapter, firstly, the author describes and summarizes existing publications on foreign and domestic asset appraisal researches. In summary, foreign researches focus on the objectives of asset appraisal, relationship between appraisal value and market value, share price, future earnings, etc. Domestic researches focus on theories and methods of asset appraisal, appraisal results, problems and their causes. As the primary focus of in this chapter, the author through theoretical deduction and mathematical reasoning presents two creative models to examine possible errors and errors direction in the results of asset appraisal. Then, the authoruses sample data from 476 companies listed in China and examines two hypothesis deduced from the two niodels using the scientific methods of narrative analyses, tropical and stabilit'v tests to prove the two models generates reasonable results on the existence of overvaluation and undervaluation phenomena in asset appraisal and the direction of errors. At the same time, the author selects certain companies listed between 1993 and 1998 and conducts positive research on their asset appraisal. The results indicate that no overvaluation or undervaluation exists in this sample of listed companies taken as a whole, however, "earnings ma nagenlent" generally e\ists in these conlpanies in the first 3 years after their listing.Chapter 4 Positive Research of Asset Appraisal of IPO Companies (Part 2)- Examination of the four impairment provisions. In this Chapter, by making use the change of accounting system in China in 1999, the author studies specific classes of assets in (letail such as the short term investments, account receivables, inventories and long term investments etc. and further examines the...