Issues Related To Asset Impairment

Asset impairment is an important issue of modern accounting, and the research on it can be expanded into several aspects, such as its overview of research results, theoretical source, history, accounting treatments (including recognition, measurement as well as disclosure), comparison of international accounting standards for it, and its application. Our country had its separate accounting standard for asset impairment since February 2006, when the Ministry of Finance issued the Accounting Standard for Business Enterprises No.8. The author believed that, with more research on the accounting standards for asset impairment and its normative application both at home and abroad, it's of significance to learn and have a discussion on it.At the first half of the article, the author discoursed on the overview of research results, theoretical source, history, comparison of international accounting standards, accounting treatments of asset impairment. In the process of writing the article, IAS (International Accounting Standards) and SFAS (Statement of Financial Accounting Standards) were quoted several times as they are now influential internationally.The article also included the interrelated data of asset impairment of listed companies in Shenzhen and Shanghai equity markets, for the year 2004 and 2005. After the all-around description of them, it came to the conclusion that a quite number of the listed companies did not obey the rules when they encountered the accounting treatments of asset impairment.In order to make the article impressive, the author cited a case of Sichuan Changhong (stock: 600389). The company experienced a huge loss in 2004 because of its improper treatment on asset impairment in prior years.The newly-issued accounting standard for asset impairment has detailed regulations on accounting treatments, and this makes our country more close to IAS. Moreover, it's more suitable for the development of Chinese stock market. At the end of the article, the author put forward some opinions and suggestions for the new accounting standard after careful and thorough comprehension of asset impairment.