The Impact Of The New Impairment Of Assets Standard On Earning Management

Feb fifteenth, 2006, Ministry of Finance released the new Chinese accounting standards system.The Impaired Assets was not allowed turn back once it was Confirmed. To reflect the financial situation and the result of operation of the companies, the principle of allowance for impairment assets obeys the fundamentals of wariness, but it is different in reality. Because of some inherent premise and restriction of the security market, companies which using the policy to adjust the profit makes the problem of accounting information even worse. 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. Driving internal interests, some listed companies will do short-term remedial actions. Because it is the last chance to turn back the Impaired Assets which were confirmed previously.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, this paper introduces the motivation and manifestations of the earning management of China's listed companies. The thesis takes the contrast of Chinese Listed Companies before and after new accounting standards as the research object, and gives analysis on the present situation that Chinese listed companies use the confirmed and turn back of impaired assets and the impact of new accounting rules for impairment of assets for earnings management.According to the descriptive statistics and variance analysis, the analyses of accounting data from 2002 to 2006 partly reveals the trend of the impaired assets of our listed companies since 2006.Then draws the conclusion that ratio of every impairment allowance item decreased as the decreasing of asset's liquidity by the analysis of the execution of asset depreciation accounting policy in the listed companies. Analysis the problem that existed in the course of execution of provision for assent impairment. Proved that there are indeed lots of turn back of the impaired assets in China's securities market 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.