The Accounting Issues In The Equity Incentive Of Chinese Listed Companies

In today's highly competitive environment, human capital is becoming increasingly important in the enterprise. Daughter easy to get, one will be hard to find. What kind of constraints and incentives to retain talent is an important issue facing businesses. As a long-term incentive, Equity incentive makes managers and the company's fate be closely linked. Equity incentive effectively solves the problem of agency cost. It is an ideal incentive mechanism. Known as"golden handcuffs"of the growth of corporate performance, equity incentive has been touted by much business since it generated. Even after the 2008 financial crisis, equity incentive continues hot.Blindly follow the trend in the enterprise behind, it is worrying that the hidden risks are difficult to predict. With the development of equity Incentive, its accounting problems can not be ignored. Different accounting treatment has different economic consequences. In 2001, the series of events about Enron, WorldCom had aroused great concern. This also sounded the alarm of the accounting treatment of equity incentive. Chinese academic research on incentive stock options is primarily on the accounting recognition and measurement. However, comparative study about the accounting treatment of different types of equity incentive is less. Therefore, it lacks of a strong argument about appropriate equity incentive model for listed companies in China.Aslo; the recommendations can't grasp the key. This paper starts the accounting treatment of equity incentive, and use case analysis. This paper tries to explain the application of different equity incentive model in different enterprises,and eventually to found more suitable equity incentive model for the development of Chinese enterprises.This paper first introduces the basic overview and accounting treatment of equity incentives. The author has a basic understanding of equity incentive. It laid the theoretical foundation for this paper. Then, the author will compare the accounting treatment of domestic and international equity incentive. The author hopes to find the differences and the problems in China's listed companies. The author points out the cost of equity incentive and the fair value measurement model is a trend. And there are incomplete disclosure problems on equity incentive in China's listed companies.The next, the author takes Zhong Jie Company and Vanke for examples. Zhong Jie Company uses restricted stock model and Vanke uses stock options model. The author compares the accounting treatment of these two models. The author thinks stock option model is suitable for Start-up Company and restricted stock model is more suitable for the development of a stable company. It is not suitable for the application of the equity incentive in China's current market environment, especially the stock options that are more complex patterns.Specifically, the structure of this paper is:In the introduction, the author describes the background and significance of this paper. In addition, the author also reviews the domestic and foreign scholars on important accounting issues equity incentive results.In second chapter, the author describes in detail the basic overview, the basic theory, the main model and application of equity incentives. This chapter laid the foundation for this paper.In third chapter, the author gives a comprehensive discussion about accounting treatment of equity incentive in China's listed companies. By this chapter, the author has an initial understanding of the problems about the accounting treatment of equity incentives in China.In fourth chapter, through the comparison of China and foreign countries, the author can further find the problems about the accounting treatment of China's equity incentive. By learning from foreign experience, this chapter makes the foundation for the author's recommendations.In fifth chapter, the author takes Zhong Jie Company and Vanke for the cases, and analyzes accounting problems on both stock options model and restricted stock model. By the analysis, the author thinks it is not suitable for the application of the equity incentive in China's current market environment, especially the stock options that are more complex patterns.In the last chapter, the author thinks about the problems on equity incentive of China's listed companies again. The author thinks the equity incentive should be measured at fair value model. And costs should be amortized in the period. The author also thinks the provisions of payment of shares in China's share-based payment accounting standards and international accounting standards should be converging.