Research On The Motivation Factors Of Listed Companies' Long-lived Asset Impairments

Compared with the short-term assets, long-lived assets are employed longer and it is more difficult to decide their fair value, so once there is impairment it would have great impact on the book value of assets and accounting earnings. With the development of the security market, Ministry of Finance has formulated a series of accounting polices on impairment of assets, so that the quality of the enterprise assets can be truly reflected, thus, the effectiveness of accounting information will be improved."Accounting System for Enterprises"sets out the long-lived asset's impairment policy. So how the policy has been carried out, what factors influence the behavior when Chinese listed companies wrote-down the long-lived assets and were there any manipulations? These above are what this thesis focus on.The thesis summarizes some theories and policies related to the asset impairment and points out the policy choosing motivation hypothesis and the inevitability and the rationality of the choosing behavior. Based on the regression model, contract cost, economic factors, right offerings tendency, firs loss, special treat, CEO altering and auditor's opinion are chose as variables to test the effect to the long-lived assets impairment. By researching on 949 times long-lived asset impairments of 649 listed companies from year 2002 to 2004, the results show that the company's scale, debt-equity ratios, the business income growth, first loss and the auditor's opinion are statistic positive in impairment of long-lived assets. At the same time through the study of the companies'follow-up year situation which were loss first time in year 2002 and 2003, the result shows that the listed companies would recognize more impairment at their first loss year and use"big bath"to make up the deficits and get surpluses. At last the thesis gives some suggestions on how to supervise the use of the long-lived asset's impairment policies in the right ways.