Accounting Rules Evolution And The Definition And Distribution Of Enterprise Rights

The publication of new Enterprise Accounting Principles in our country stands for the internationalization of our country’s accounting principles, and the most important is the introduction of fair value measurement. But2008global Financial Crisis pushed fair value accounting in the teeth of storm. Many politician and financial staff considered fair value accounting as the main cause of the financial crisis outbreak and the rapid spread. FASB has vigorously denied that fair value accounting is the main reason of the crisis outbreak, but it has to admit that there are defects in fair value accounting, and the rules should be revised. So a series of problems arise:How should institutions change? What factors are involved in institutions changes? And what is the logic of institutions changes? What are the attributes of accounting principles? And how should fair value accounting make changes?Abiding by the main ideas of endogenous institution, this paper tries to establish the theoretical frame of institutional analysis, including property, technology and interest groups game, based on the definition of property rights. Property is the basis of property rights, has the characteristic of scarcity and usefulness, and has influence on technology choice and institutional arrangement. So property is also the basis of institution changes. Technology can be divided into property development technology and rights definition technology. Property development technology can promote economic growth, and improve the volume and value of the property. Rights definition technology can define property’s scope, quantity and value, and provide property information to interest groups. So the attributes of property have influence on the choice of two technologies. Because of the transaction cost, property rights cannot be completely defined, and a portion of interest is placed in the public domain (Barzel,1989). Interest groups analyze the information they can get to decide how to grab the interest in public domain. When the game of interest groups achieves equilibrium, new institution appears. The new institution can define attribution of property rights, standardize the selection and use of technology, lower transaction cost, and promote the value of the property. The public domain of property rights objectively exists, and cannot be completely eliminated, so grabbing interest of public domain becomes the power of institutions’changes. Grabbing the interest of public domain is also continuous, so the institution is constantly evolved.The basic structure is as follows:Chapter1:introduction. This chapter mainly introduces the research background, significance, methods, and framework, and points out the significance of constructing the framework of analyzing property right institution to analyze accounting rule changes.Chapter2:literature review. This chapter mainly reviews and comments the institution change theories, property right theories, and the accounting rules changes. Comparatively analyze Acemoglu, Barzel, and Grief’s endogenous institution changes theories, to find the logic and basic factors in institution changes.Chapter3:based on the definition of property rights, this chapter constructs the theoretical frame of institutional analysis, including property, technology and interest groups games. Property rights definition includes three levels of property, technology and interest group game. Property is the basis of property rights. Property development technology can promote economic growth, and improve the volume and value of the property. Rights definition technology can define property’s scope, quantity and value, and provide property information to interest groups. Based on self-interest maximization, interest groups analyze the information they can get to grab the interest in public domain, accounting to cost-benefit principle and queuing rule. When the game of interest groups achieves equilibrium, new institutions appear. Because of the transaction costs, the public domain of property rights cannot be completely eliminated. So the institution is constantly evolved. At last, this chapter analyzes the historical cases, based on the logic of the theoretical framework.Chapter4:analyze the logic of accounting rules changes. Accounting rules have two properties:technology and institution. As Rights definition technology, accounting can define property’s scope and value, and provide property information to interest groups. Under accounting assumptions, accounting technology establishes accounting books, uses accounting methods to measure the value of property and rights through the procedure of confirmation, measurement and reporting. As property rights institution, accounting is the outcome of interest groups’games, and has the function of defining property rights. Accounting can directly define the property rights, and make subsequent distribution about enterprise rights. And accounting information can be used to predict future property and rights. Public domain will also appear when accounting rules allocate or define enterprise rights. Interest groups analyze information they can get to grab interest in public domain. When the game of grabbing interest achieves equilibrium, new accounting rules appear. So the accounting rules are also constantly evolved. The power of accounting rules’changes is to grab interest in public domain between interest groups. At last construct the static game model between enterprise management and accounting rules-making organization, to reveal equilibrium conditions of generating new accounting rules, and further point out the factors to be considered in changing accounting rules.Chapter5:analyze fair value accounting based on the institution analysis framework this paper promotes. This chapter focuses on the procyclicality effect, analyzes the value attribute of financial assets, risk identification technology, and the game behavior of interest groups, and tries to find the logic of fair value accounting in defining financial assets. And this chapter empirically tests the value relevance of fair value accounting information in our country. The test results confirm that our country’s fair value accounting information has value relevance, but cannot fully define the value of financial assets. Finally, put forward the reform direction of fair value accounting in our country.Chapter6:conclusion.