The Impact Of Asset Impairment To The Financial Crisis Forecast

Along with the deepening of the securities market's reform and the rapid development of capital marketslisted companies are exposed to a more complex market riskthe more and more companies emerging into bankruptcy and other financial distresswhich seriously damaged the order of the securities marketin order to protect the interests of all parties related to the listed companiessince 1998China's securities authorities implemented a special treatment (ST) measures to those listed companies who have two years in a row or a loss of more liabilities than assets.As a resultthe implementation of the special treatment to listed companies usually give stakeholders a greater economic lossesthe demand of the forecast that whether listed companies have a financial distress is increasing.Theoretical researchers and practioners both give a great deal of concern on it.Domestic and foreign research shows thatmost studies of prediction to the company financial distress generally based on the assumption that the listed companies'financial reports are objective and fair and then by constructing a reasonable model to get early warning signal of those companies who are in a serious financial situationthese models'predict rate of miscarriage of justice are usually 20% -30%.Howeveraccounting standards are to be tested in practice and improved constantly.Some long-term asset impairment studies have shown that listed companies back to the impairment of long-term assets are not as a result of its improved asset quality and better economic factorsbut because of their earnings management motive.Thereforein the case that China's surplus in the management is more seriousthe assumption is not consistent with realityit impacts the accuracy of the forecast model.To this endthe research that whether the assets impairment accounting policy may impact the forecast of company's financial distress and the extent of the impactand to help stakeholders make the right decisions have a sense.