The Impact Of "Impairment Of Assets" Standard On Earning Management Of Listed Companies

Feb 15th,2006,Ministry of Finance released the new Chinese accounting standards system for business enterprises which included 1 Basic Standard and 38 Specific Standards. The new standard on provides that the Impaired Assets was not allowed turn back once it was Confirmed.According to the previous research,the confirmed and turn back of impaired assets was always been an important means of operating earnings management of the Listed Companies. It is undoubtedly that the new accounting standards will make the means of earnings management Failure. Because it is the last chance to turn back the Impaired Assets which were confirmed previously,it is widely speculated that lots of turn back of the impaired assets will appeared this year.This paper selects the basic theory of impairment of assets as a starting point for research. Firstly,introduce the research results of domestic and foreign scholars in the field of asset impairment accounting. Secondly,make a brief review of the meaning of asset impairment accounting,the development history,and the theoretical basis. Thirdly,analysis the contact and distinction of impairment and depreciation,introduce the debate about weather turn back the impairment of assets should be allowed. At last,describe the history of impairment of assets in China.The Part 2 of this paper introduces the motivation and manifestations of the earning management of China's listed companies. We firstly consolidated the definition of earning management which is given by domestic and foreign scholars. Then,analysis the cause of earning management that happened. At last of part 2,we make a case study about the event of south Securities Company.Empirical Analysis begins in part 3. There are 100 enterprises have been selected. According to the descriptive statistics and variance analysis,the analyses of accounting data from 2001 to 2006 partly reveals the trend of the impaired assets of our listed companies since 2001,and proved that there are indeed lots of turn back of the impaired assets in China's securities market.Finally,the conclusion is that the drawing and turn back of the impaired assets is significantly different in the level ofα=0.05 each year from 2001 to 2006. In the last part of this paper,in view of the above findings and the problems during the implementation of the new accounting standards,the regulation of earning management of impaired assets in the future and some policy recommendations were are advised.