Research On The Impact Of The New Asset Impairment Accounting Standards For Accounting Earnings Management

Since 1998, four asset impairments was put aside in the "Accounting System Co., Ltd." which published by the Ministry of Finance to eight asset impairments that called for "enterprise accounting system" in 2001, asset impairments has become a commonly used earnings management tool in the listed companies. This caused the stock market, the media, the public and the securities regulatory authorities uneasy. On February 15, 2006, the Ministry of Finance issued the "Enterprise Accounting Standards No. 8 - Impairment of Assets", the article 17 provides that an asset impairments loss was confirmed and shall not be back in subsequent accounting period, which is intended to restrict the use of asset by listed companies to carry out the management of surplus value. This article discussed the new asset impairment accounting standards for the impact on earnings management, exploring the effect on the implementation of new asset impairment accounting standards.As the changes of accounting policy on asset impairments, the accounting profession's views on the impact of earnings management are different. This article collected the 2002-2006 statistical sample of listed companies to statistic and describe the provision and back of long-lived asset impairments, which was found the phenomena of provision and back is abnormal in 2005, but it was normal in 2006. And then, we discovered the provision and return of the long-lived asset impairment is not significantly related to the level of earnings management. Therefore , we propose the new asset impairments accounting standards is just a way to reduce the accounting earnings management and curb a surplus of space management in the course of implementation when it had been put into effect. However , there are so many of earnings management means and new policy issues, which offered space for the management of surplus space, so the new asset impairments accounting standards did not significantly reduce the level of accounting earnings management. In addition, this paper also found that the change of new accounting standards is significantly related to the level of corporate earnings management , which explained the enterprise adjusted earnings management tools when accounting standards was changed.