Research On The Financial Effects Of Long-lived Assets Impairment Reversals

Impairment of assets has always been a very controversial issue, for there are two completely different points of view in theoretical field, someone allows widespread impairment of assets but some one prohibits doing this. Since the theoretical debate are going on, On February 15, 2006 Ministry of Finance of China issued the "Accounting Standards for Enterprises No. 8 - Impairment of assets", defined provision for impairment of long-lived assets may not be reconverted, aiming to reflect the true information value of corporate assets, through the financial reports provided useful accounting information to stakeholders. The question focus is the new asset impairment criteria whether contain the enterprises to carry out impairment of assets back to a surplus of manipulation, to improve our existing accounting information quality? This article hypothesis "Accounting Standards for Enterprises No. 8 - Impairment of assets" carry out from 2006 in companies, according to new criteria to re-accounting corporate financial data, analysis the impact of impairment of assets back to the financial situation of the enterprise , to understand the financial effects of assets impairment for the use of the new guidelines, the author hopes that the above-mentioned studies can provide empirical evidence to the accounting standard-setting body to evaluate and improve accounting policies, improve the accounting system and further improve the quality of accounting information for reference. The research component in theory, this paper first introduced the related concept of assets impairment; On the basis of the results of previous research to sum up the theoretical basis for impairment of assets; From the relevant theory start, respectively analysis in-depth the reasons of allow reversal assets impairment and the prohibition, taking China's specific national conditions into account made a special note for the reasons of the new asset impairment for prohibit reversal impairment assets.In the empirical research part,statistics the situation of assets impairment reversal of listed companies on China's manufacturing industry. Reversal of the implement company's assets impairment reversal of financial data to compare before and after the test To calculate and compare before and after the 2006 reversal assets impairment of financial data, Analysis the impact of Impairment of assets back to the long-term solvency of enterprises, operating capacity and profitability .Finally, the paper believes since the development of our country's capital market is short and the market players is still immature, to implement a sound basis of Marxism asset impairment accounting model more appropriate. Although the study sample size is small, may do not have a universally convincing, but to some extent the findings supports China's "Impairment assets" norm about "long-term assets, Impairment losses against back" which to conform to China's actual conditions.