Research On Debt Restructuring Standard And Its Implementation Effect

In 2006 the Ministry of Finance issued the new set of accounting standards system. The new Debt Restructurings Accounting Standard made great influence to listed companies in China.Important differences exist between the old Debt Restructuring Accounting Standards and the revised one. The revised standard required that the debtor should recognize the balance between the actual amounts of settlement and the book value of the debt as the current earning, rather than in the capital reserves. It coincides with the international accounting tradition, but in the opinion of some scholars, the revised one provided opportunities for some enterprises to increase profit and do harm to the capital market. The old one is more suitable for our present market situation. Other people consider that the revised one incarnates the essence of debt restructure, it can not be abused.The paper bases on the 2008 annals of ST Listed Companies at ShangHai stock exchange, discusses the implementation effect and influences of Debt Restructuring Standard, in order to evaluate this revision more completely and objectively.Compares with similar researches to date, it collects all the annals of ST Listed Companies at ShangHai stock exchange in 2008,makes detailed analysis of the influences, includes the way of debt restructure, the dispose of gains and losses and tax avoidance. Second, it introduces the development of Debt Restructurings Accounting Standard and debt restructure in our listed companies, discusses the trait and problem. Finally, according to the conclusion, it provides some policy suggestion such as enhance information disclosure of earnings management, improve the fair value measurement model, increase the supervision of debt restructuring.It finds that listed companies have made use of new Debt Restructuring Accounting Standards of earnings management and companies with different incentive and earnings level will show different characters in such earnings management. Bases on our findings, we conclude that the revised standard need to be improved.