Research On Listed Banks' Financial Ratios Under The New Accounting Standards Of Financial Instruments

On February 15, 2006, Ministry of Finance had promulgated a new accounting criterion which included one basic standard and 38 specific standards. There are four specific standards which are related to the bank industry: Accounting Standard for Business Enterprises No.22—Recognition and measurement of financial instruments, Accounting Standard for Business Enterprises No.23—Transfer of financial assets, Accounting Standard for Business Enterprises No.25—Hedging, Accounting Standard for Business Enterprises No.37—Presentation of financial instruments. These changes of New Financial Instrument Accounting Standard have changed the format of listed banks' financial reports, the hybrid measurement of fair value and historical cost, the derivative instruments recognized in financial report. Whether these changes could affect the financial reports and financial ratios of listed banks and what's the significance of these changes are the problems this thesis is going to study.Most of the exiting documents only focus on financial instruments accounting standards' influence on bank supervision index-capital sufficiency index, and how to adjust the influenced index based on supervision framework existing, but rarely discuss about other ratios in bank financial index system. Besides, very few researches have discussed about such subjects as whether new financial instruments accounting standards can cause changes to other ratios and how the shareholders may react to these changes when managing financial issues. Under this background, this thesis mainly focuses on new financial instruments accounting standards' influence on listed banks' financial ratios and listed banks' shareholder's reacting measures to the influence.Financial ratios in bank industry are quite different from other industries because of its specification from others. First, I introduced bank industry's financial ratios from the aspects of fluidity, security and profitability in chapter one. Then, I summarized the history of financial instrument accounting's constitution and modification process by International Accounting Standards Commission (IASC) and Financial Accounting Standards Board (FASB), and elaborated the differences between the old accounting regulation and the new financial instrument accounting in chapter two. In chapter three, I analyzed the influence the changes mentioned above could cause to bank industry's financial ratios. Finally, I chose five listed banks and made a contrast about their fluidity ratio, adequacy of capital and return on assets. In the end, the thesis drew a conclusion that the new financial instrument accounting has a certain influence on listed banks' financial ratios which is not significant.This research has to some extent enriched existing documents in this field, and is helpful for financial reports' users to make economic decisions. But, because of data's insufficiency and the researcher' inadequacy in basic positive study skills, this thesis couldn't research any further, which is a major regret of this article.