A Study On The Influence Of Assets Impairment To Earning Management Of Listed Companies

The earnings management of the existence in corporations becomes one of the hottest issues of general public. Excessive earning management can not only interfere the efficiency of economic resources allocation,but also will mislead to make a strategic decision of invest and endanger the security of creditors of funds, So do the effective management of enterprise surplus identification is vital. In 1998 Ministry of Finance in China put forward that the enterprise should make four impairment provisions, In 2001 The Accounting Standard for Business Enterprises stipulates that the enterprise should make eight impairment provisions, asset impairment was once regarded as a tool for earnings management of listed company, mainly because the asset impairment judgment standard is relatively complex, accountant for impairment amount determination needs certain professional judgment, it contains certain subjectivity, which provides the opportunities of choosing accounting methods that could benefit enterprise and their own. So asset impairment becomes a tool for earnings management of listed company.In order to regulate the listed company asset impairment recognition, measurement and disclosure of the relevant information, in 2006 the ministry of finance promulgated new accounting standards for the first time in asset impairment as a separate accounting standards debuted, the provisions of the new asset impairment compared with the original accounting standards undergoing many changes, New Accounting Standard for Business Enterprises No. 8 provisions to impairment of assets, once the provision for impairment of long-lived asset are made, they shall not be reversed, such as the fixed assets, intangible assets, which keeps within limits the earnings management behavior of listed companies with the impairment of long-lived asset. But the formulation of new impairment standards should be fully considered the balance of the feasibility and binding asset impairment, not may each all do detailed regulations, so the new guidelines inevitably for enterprise of earnings management left space. New asset impairment standards in China has implemented over four years, the implementation of the new standard of enterprise earnings management produces new effects, and causes social eager concern.Under implementing the great background of new asset impairment, this paper uses the research technique which the theory analysis and case study unifies, based on the actual asset impairment situation of Sichuan Jinding in 2009,using the two basic earnings management metrological model, combining with the financial condition of the company itself, reason out that Sichuan Jinding in 2009 undertakes earnings management by using asset impairment accounting policies, and analysis the earnings management means and motivation. Finally, the thesis draws a conclusion that after the application of new accounting standards, the way that listed companies use asset impairment accounting policies to manage earnings has changed. Sichuan Jinding tends to operate profit by using the short-term assets impairment provision and back. When it was in a loss position and the period of changing management, its earnings management motivation is obvious. At last, this article is trying to offer a few proposals with respect to the problem of the earnings management of the Chinese listed companies by assets impairment.