Study Of High-tech Enterprises In China A Number Of Accounting Issues

With the economy development and progress in society, the world has entered the Knowledge Economy epoch. High-tech industry is not only an impelling force for obtaining competitive advantages, but also an impetus for continual development of social economy. Most countries, especially developed countries put high-tech industry down as the most important issue, because it is a significant reflection of national strength. Obviously, the one who has the advantage in high-tech can be survive in the impetuous competition. Therefore, developing high-tech has increasingly become the main trend for global economy. Without exception, China has moved focus on this industry to ensure the steady development of economy and improvement of comprehensive national strength. Due to the importance of high-tech, academe has been concentrated on the research on the relevant issues in the industry. However, from accounting point view, the studies about high-tech enterprises, especially the recommendations on accounting practices in high-tech enterprises, are few. From the accounting and financial analysis angles, this study specifically focuses on accounting theories, financial accounting and analysis of financial reporting, and points out some opinions. The study is divided into four parts, and the contents and key points as follow: In the introduction part, the study puts forwards the research background and the research objectives at first. With advent of Knowledge Economy, amount of high-tech enterprises are occurring in the market, nevertheless, the current accounting theories cannot catch the speed of development, and have a great limitation on proper evaluation on the performance and potentials of these enterprises. Thus, the study aims to discuss the points about financial accounting and financial analysis deeply. It is expected that the authorities can point out more suitable policies to guide the accounting practices of high-tech enterprises. In addition, the study reviews the previous research on human resource and intangible assets, which provide theoretical bases and references for my research. Chapter one examines the accounting theories for high-tech enterprises. Firstly, the study defines high-tech enterprise, and identifies their basic characteristics. High-tech enterprise is an enterprise producing high-tech products, not only using of high-tech facilities and techniques. The features of high-tech enterprise are: 1. different risks and types of asset in each developing step; 2. high operational risk and impetuous competition; 3. high investment, rapid growth, high profit, and high additional value. Secondly, the study analyses the structure of accounting theories from basic hypothesis, accounting principles and accounting elements. The external environment of high-tech enterprises (Knowledge Economy) is different from the external environment of traditional enterprises (industry age); therefore, the limitation of accounting hypothesis appears more obvious. Hence, it is expected that the authorities can bring forward accounting hypothesis system matching the requests of Knowledge Economy. Intangible assets have vital function in Knowledge Economy; this changes the dominant situation of tangible assets investment, so the traditional accounting principles cannot match the new situation. Accounting hypothesis, and accounting principles determine the accounting elements, and how to subdivide these elements to meet the needs of information users. Beyond the basic elements, labour assets, human capital, and risk assets, etc are important for high-tech enterprises. Chapter two identifies some relevant issues about financial accounting for high-tech enterprises. The study mainly puts attention on analysing how to control the developing and researching costs, human resource, risk assets, and intangible assets. Firstly, high-tech enterprises generally invest a lot of assets in development and research. The current accounting policies classifies these investments as variable costs, but such a classification is not suitable for high-tech enterprises. According to the different experiences of the global enterprises and the characteristics of high-tech enterprises, the study argues that investment in research should be classified as variable costs or assets depending on the concrete facts.Secondly, in the term of human resource, it has not been brought into the current accounting system and accounting management. The study claims that human resource can be classified into human resource for manufacture and for management, and they have different value for enterprises. The study defines human capital as the capitalization of human resource for management. Human capital owners have claim right on fixed interests and fixed reward, and distribution right on net profits as well. Accordingly, human capital's participation in profit distribution possibly can attract and motivate the human capital owners. Thirdly, regarding the risk assets, they are necessary capital for development of high-tech enterprises. Correct account of risk assets can not only guarantee the profit of the existing investors, but also allure more potential investors. This study suggests the possible accounting measures for risk assets of high-tech enterprises. Finally, this study analyses the accounting issues about intangible assets assessment, amortization, and stock. Furthermore, the study evaluates the publication model of certain information, and further advances the more proper publication model for high-tech enterprises. Chapter three, considering the analysis of financial reporting, identifies weaknesses arising from high-tech enterprises based on the reviews of current analysing system of financial reporting. Meanwhile, this section suggests more appropriate analysing system, which seems to analyse and predict the potential favourable factors and risk factors more scientifically and accurately. The innovative points of this study are: Comparing high-tech enterprises with traditional enterprises, this study demonstrates that research cost, labour resource, human capital and risk asset should be taken into account for high-tech enterprises. Furthermore, this research discusses the issues about the confirm conditions, computation model and reporting contents, which are expected to be helpful for constituting complementary regulations of accounting calculation. Besides the current traditional components of financial reporting analysis, this study points out more appropriate new components, such as...