The Equity Capital Theory And The Reformed Finance Report System

Finance report of listed companies is the tool that investors decision—making. The system of finance report based on the masters of the company of the stakeholders. The equity must be keep between rights and interests and duty in the finance report. The equity capital cost theory believes that the companies belong the shareholders who give finance capital to it. They come down on the residual income and the residual control. The measure and adjust accounts of the cost of the shareholder equity capital is not necessity because the shareholders are charged with the management performance. So it does not meet the demand of the new economic age and must be reformed that the system of finance report based on the masters of the company of the stakeholders. But in the new economical time, the enterprise tradition financial report could not fully reveal property rights in the enterprises. It is difficult to provide the information of the objective assessment of the manager's achievements. It cannot provide accurate information of the enterprise profit ability in the new economical time. It gradually lose the help enterprise to build up there sources the function. This indicate the traditional finance needs to improve.It is founded that the master of the companies is the manager by analysis the company characteristic. It extends the scope of the equity capital and brings the new equity capital cost theory that the company equity capital includes the finance equity capital and manager team equity capital. Finance equity capital includes the creditor's rights capital and shareholder's rights capital. Manager team requity capital is the masters who run the company. Then manager equity capital has to be based on by the finance report system. Therefore, the manager team rights and interests become the pivot of the entire financial report system, and the manager team rights and interests is additionally the accountant essential factor, and financial report content and the establishment method are improved. The ways and means how to show it in finance report is discussed. The reformed finance report system is checked and the results prove it in effect on the public information of the listed companies.