Empirical Study On Assets Impairment And Earnings Management

To the 21st century, along with the development of the market economy and the increasing change of the economic environment faced by the enterprises, accounting for impairment of assets obtains violent development, and becomes one of the central issues concerning the regulation of accounting system around the world. In the end of 2000,"Enterprise Accounting Criteria"issued by Ministry of Finance in China (called original accounting criteria in this paper) defined'asset'in a new scientific way , standardized the processing questions of impairment of assets in a special course and emphasized the execution of impairment of assets. In the six years for the development of impairment of assets in China, accounting polices on impairment of assets has been adopted by the listed companies as a tool for profit manipulation because of imperfect theory and practice. On 15 February 2006,"Enterprise Accounting Standards No. 8——impairment of assets"issued by Ministry of Finance in China (called new accounting standards in this paper) standardized the identification, measurement, information disclosure of impairment of assets. The aim of new accounting standards is that the quality of the enterprise assets can be truly reflected and the effectiveness of accounting information can be improved.Denying the returns of the assets impairment is due to our situation. This paper uses the data of 417 listed companies in 2004, 2005 and 2006 to do the positive research. The results show that the assets impairment and behavior of earnings management in the listed companies are remarkable relevant, and the listed companies with motivation for loss aversion and big bath use the policy of assets impairment to increase current earnings. The results support the change of the principle. Meanwhile there is no evidence supporting the preview of mass returns.Finally, the article is to propose the conclusion, suggestions, and the research limit, and also propose some policy suggestions to perfect the policy of assets impairments of our country.