Research On The Theory Of Operational Profit And Loss Determination And Its Model

Since the 1980 s,the profit and loss determination has entered the stage of comprehensive profit and loss determination with consideration of matching.Although the comprehensive income becomes the final result of the enterprise profit and loss report,the matching principle is still the basic principle to determine the operation profit and loss,and the operation profit and loss is still an important standard to measure the enterprise performance.On the contrary,in the process of international convergence of China's accounting standards,operating profit,total profit,net profit,total comprehensive income and many other profit and loss determination models are formed,but there is a problem that fail to consider the matching principle,which makes it difficult to reflect the operating results of enterprises.The fundamental reason lies in the lack of a deep and universal understanding of the law of profit and loss determination.Because the fundamental purpose and final value of profit and loss determination are not explored in depth and there is no deep theoretical support,the current profit and loss determination mode is mostly adjusted according to the existing profit and loss determination mode,which follows the "comparative thinking",which deviates from the initial goal of profit and loss determination to reflect the operating results.In order to solve the problem that the current profit and loss determination model is difficult to reflect the enterprise's operating results,this paper attempts to answer theoretically why enterprises should determine the operating profit and loss,how to determine the operating profit and loss and how to apply it.First,this paper explores deeply and reveals the underlying profit and loss determination logic,and theoretically answer the question of why companies should determine operating profit and loss;Second,this paper constructs the operation profit and loss determination mode by matching operating revenue with operating expenses based on the underlying profit and loss determination logic,and further applied to the information presentation and profitability analysis of operating profit and loss determination,so as to answers the question of how to determine operating profit and loss and apply it,and finally provides the theoretical basis and general thinking framework for the operating profit and loss determination and the application of the mode.Based on the financial data of Shanghai and Shenzhen A-share listed companies from 2007 to 2019,this paper reaches the following conclusions:(1)On the theoretical level,the underlying profit and loss determination logic is the deep and universal law of determining the profit and loss of enterprises.Its internal meaning refers to: in order to realize the value orientation of "friendship lasts forever" of enterprise investors and other stakeholders,the basic objective of "accounts are always clear" is needed,so we need to determine the profit and loss,especially the profit and loss of operating activities,so we have to follow the the basic principle of service-oriented logic and revenue expense matching.Taking value rationality and tool rationality as the thinking framework,this paper reveals the underlying profit and loss determination logic.In terms of value rationality,the profit and loss determination need to solve the problem of what to do and why,which is called the value orientation(why to do it)and basic goal(What to do)of profit and loss determination;in terms of tool rationality,the profit and loss determination need to solve the problem of how to do it,which is called the basic principle of profit and loss determination.The underlying profit and loss determination logic includes the value orientation of profit and loss determination,the basic objectives of profit and loss determination and the basic principles of profit and loss determination.According to the basic idea of enterprise subject theory,the profit and loss determination is ultimately to determine the profit and loss of an enterprise for a certain period of time,and operating activities are the only direct value creation activities that can be completely controlled by an enterprise.Therefore,operating activities are the fundamental source of the survival and development of an enterprise and the source of its core competitiveness,as well as the essential difference between an enterprise and other organizations or individuals.Therefore,the central purpose of profit and loss determination is to determine the profit and loss of operating activities,so as to ensure the long-term friendship between stakeholders.It is the starting point of the underlying profit and loss determination logic to draw lessons from Pachauri,the father of modern accounting,to discuss the basic objective that "the accounts are always clear and the friendship lasts forever"."Friendship lasts forever" is the value orientation of profit and loss determination,that is,profit and loss determination is ultimately to ensure the long-term existence of friendship among stakeholders;"accounts are always clear" is the basic objective of profit and loss determination,that is,the basic objective of profit and loss determination is to determine the profit and loss account of operating activities,so as to realize the value orientation of "friendship forever";the basic principle of profit and loss determination is service-oriented logic and revenue expense matching,that is to say,within the scope of operating activities of commodity production and service provision,the profit and loss of operating activities is determined by matching the revenue with the expenses of operating activities,so as to achieve the basic objective of "the accounts are always clear",and finally realize the value orientation of "friendship lasts forever".(2)On the construction level,the operating profit and loss determination mode is a general way to get operating profit by matching operating revenue with operating expense.Operating revenue is the inflow of economic benefits from customers on the goods and services provided by enterprises,which if compared with the existing project,it can be approximately expressed as business revenue excluding taxes and additions and bad debt losses.Because the economic benefits corresponding to taxes and additions,bad debt losses in the business revenue are not really obtained by the enterprise,which is not the real revenue of the enterprise's operating activities.Operating expenses are expenses incurred to obtain operating revenue,which which if compared with the existing project,it can be approximately expressed as business costs plus sales expenses,management expenses and operating financial expenses.(1)Because the production costs incurred in the production activities and the sales expenses,management expenses and operating financial expenses incurred in the service provision activities are all expenses incurred for the purpose of obtaining operating revenue,they should be included in the scope of operating activities expenses.On the contrary,the contingency and investment items such as asset impairment loss,investment income,fair value variable income are not expenses incurred for the purpose of obtaining operating revenue,and there is no causal relationship between them,so they should not be included in the scope of operating expenses.Operating profit is the result of matching operating revenue with operating expense,reflecting the results of operating activities.Through the accounting of operating profit and loss determination mode,it provides specific accounting treatment measures for the actual implementation of operating profit and loss determination mode in the enterprise.Compared with other profit and loss determination modes,it shows that the difference between the operating profit and loss determination mode and other profit and loss determination modes is the difference between the revenue and expense boundary,but the fundamental difference is the difference between the theoretical basis and the deductive process.(3)On the application level,the profit statement information presentation and profitability index are modified based on the operating profit and loss determination mode.Based on the operating profit and loss determination mode,it is found that the essential function of the profit statement is to reflect the results of operating activities.The presentation of the profit statement is limited by the uncertainty of the revenue,expenses and profit elements of operating activities.Therefore,this paper defines and adds the items of "operating revenue","operating expenses" and "operating profit" respectively in the profit statement,in order to clarify the revenue,expenses and profit elements of operating activities,so that the profit statement can directly reflect the results of operating activities.Based on the operating profit and loss determination mode,this paper investigates the common profitability indicators,and finds that the common profitability indicators are not able to accurately measure the profitability of operating activities,so the operating profit rate were constructed to reflect the profitability of operating activities.Operating profit rate is the ratio of operating profit(operating revenue-operating expenses)to operating revenue.Because the operating profit rate is based on the operating profit and loss determination mode,including the revenue and expense elements of operating activities,and excluding the revenue and expense elements of non-operating activities,so it reflects the profitability of operating activities.(4)On the level of verification,the empirical research results show that the operating profit and loss determination mode can determine the operating results more scientifically.From the results of the operating profit and loss determination mode,namely operating profit,and the index of operating profit rate based on the operating profit and loss determination mode,the rationality of the operating profit and loss determination mode is investigated.The results show that the operating profit determined by the operating profit and loss determination mode can better reflect the operating results of enterprises,and has high quality and application value.The operating profit rate based on the operating profit and loss determination mode has high information content and application value.