Accounting Interests In Theoretical Research

Equity theories in accounting focuses on owners equity of enterprises. The framework of accounting theory has been formed from defining the intension and extension of equity. The origin of equity theories in accounting is double-entries bookkeeping theory. After several centuries exploration and practices, several different schools of equity theories compete today. These theories have strongly influenced related accounting theory, standards and practice in deferent extents, and played an important role in corporate governance structure.The methodology of this paper is normative . Firstly, on the basis of summarizing the main opinions of six equity theories, the author applies the theory of firm ownership in economics, discusses the relationship between enterprises and the owners, assesses these six equity theories, and deduces that only one equity theory, the residual equity theory is suitable for modern enterprises. Secondly, the author also summarizes the development of the capital structure theory of modern finance in recent three decades and the related studies of empirical accounting research in recent two decades and verifies her opinions above. Finally, the author attempts to interpret and predict the objective of accounting, accounting principles and the presentation of financial statements based on the residual equity theory.This dissertation consists of six chapters.Chapter one, Introduction. In this chapter, the author puts forward the main issues of this dissertation and discusses the methodology and the main contents of the paper.Chapter two, the summary of the equity theory in accounting. In this chapter, the author thoroughly discusses the development of these six equity theories and the main issues of these six equity theories .Chapter three, the two main equity theories. In this chapter, the author compares the proprietary theory with the entity theory .describe another revised entity theory put forwarded by Anthnoy.Chapter four, the choice of the equity theory and the firm ownership. In this chapter, the author poses her opinion on the equity theory for modern enterprises. She believes that the only suitable equity theory for modern enterprises is the residual equity theory.Chapter five, the theory basis of the residual equity theory. In this chapter, the author summarizes the main issues of the residual equity theory and seeks the supports from economics, finance and accounting.Chapter six, the indicative significance of the residual equity theory in the accounting theory and the presentation of financial statements. In this chapter, the author attempts to interpret andpredict the accounting theory and the presentation of financial statements based on the residual equity theory.The theoretical invention of the dissertation lies in :1. Thoroughly introducing the development of the equity theories , putting forward the point of view that the residual equity theory is the only suitable equity theory for modern enterprises based on the relationship of ownership of firm and entity.2. Interpreting and predicting the accounting theory and the presentation of financial statements based on the residual equity theory.As a result of the limitation of the researcher's mathematical background, an important issue, equity pricing model is excluded from this paper. Furthermore, There are some impertinencies as well as documentary restrictions in this paper. The researcher will work on this afterwards.