The Research On The Effects Of Implementation Of Accounting Standards Of Impairment Assets

In 2001,implementation of the impairment of assets that include eight items Were required by the Ministry of Finance in China.Also,asset write-down reversals Were allowed without much restriction if specified terms were met.It has been six years till the New Accounting Standards are affective in 2007.During this period, reporting incentives have dominated managerial reversal decisions,which have brought about serious distortion in accounting information.For this reason,the soul of "Enterprise Accounting Standards No.8-Impairment of asset" issued by The Ministry of Finance in China on 15 February,2006 is to react the real situation of enterprises' assets,and to provide high quality and policy oriented accounting information for investors and creditors in the form of financial report.In particular,for the phenomenon of listed companies using impairment of assets to manipulate their profits,any recognized impairment losses cannot be reversed required by the new Accounting Standards.So is the revision of "Impairment of Asset" conforming to the actual conditions of our capital market? Whether the provisions that long-term assets impairment cannot be reversed,can restrict the enterprises which used to manipulate their profits through impairment of assets? Which factors will influence the effects of accounting standards of impairment assets and how to improve it? It is the thinking on these issues to be the motivation of this research.The paper could be divided into six parts.In the first part,the author has introduced the research background,purposes and related literature review.Part two introduced the content and theoretical basis of impairment of assets.The third part compares the Impairment of Assets under the new and the old accounting standards. The forth part analyzed the theoretical basis of reverse of impairment.Part sixth points out advances suggestions on improving the impairment of assets accounting and accounting practices. Finally,our results show that the accounting mode base on the conservatism principle would be more suitable to our country.The conclusion supports the new provision that any recognized impairment losses cannon be reversed.