The accounting thought of impairment of assets may trace to the 11th century inEurope. To the 21st century, along with the development of the market economy and theincreasing change of the economic environment faced by the enterprises, accounting forimpairment of assets obtains violent development, and becomes one of the central issuesconcerning the regulation of accounting system around the world. In the end of 2000,"Enterprise Accounting Criteria" issued by Ministry of Finance in China (called originalaccounting criteria in this paper) defined 'asset' in a new scientific way , standardized theprocessing questions of impairment of assets in a special course and emphasized theexecution of impairment of assets. In the six years for the development of impairment ofassets in China, accounting polices on impairment of assets has been adopted by the listedcompanies as a tool for profit manipulation because of imperfect theory and practice. On15 February 2006, "Enterprise Accounting Standards No. 8-impairment of assets" issuedby Ministry of Finance in China (called new accounting standards in this paper)standardized the identification, measurement, information disclosure of impairment ofassets. The aim of new accounting standards is that the quality of the enterprise assets canbe truly reflected and the effectiveness of accounting information can be improved.In view of this, this paper draws up from the theory question of impairment of assets,discusses the correlation concepts and the basic theories and analyses new accountingstandards for impairment of asset in the identification, measurement and informationdisclosure. Then by the analysis of the execution of impairment of assets in the listedcompanies, the paper points out some impacts on listed companies because of theexecution of new accounting standards and puts forward some questions about theexecution of new accounting standards. In the end, the paper points out some suggestionson the perfection of impairment of assets accounting. The whole paper is composed of fiveparts:The first part starts from the concept of asset and analyzes the meaning of asset andimpairment of assets and so on. Then the brief review to the production and developmentof international and our country's impairment of assets has been made separately.The second part discusses separately the basic theories of impairment of assets basedon the definition of asset, accounting goal, historical cost principle, conservatism principle,relevance and reliability.The third part discusses new accounting standards on the identification, themeasurement and the disclosure of impairment of assets. This is the core of impairment ofassets.The fourth part analyzes firstly the impacts on the listed companies due to theexecution of new accounting standards and finally, this part puts forward some questions.The fifth part puts forward some suggestions on the establishment and the perfectionof impairment of assets accounting, e.g. external inspection and surveillance, thecompany's governed structure and so on. |