The Financial Effect Of China's Listed Companies For Asset Impairment

Assets impairment is a very controversial issue in accounting just because of its double blade character. Lacking of specific standard of the amount of assets impairment, enterprises have a wide margin to modify its profits on their will. A lot of accounting system have tried their best to control the chaos. But it turned out to be useless. From this situation , it is urgent to establish a reasonable standard.In this dissertation, we went over the history of research in assets impairment. We studied 1105 listed companies in order to find out the correlation between the assets impairment and the ability of survive in market. We testified the effect of prudence principle by testing the assets impairment and the main incoming.In order to build the L model which can set up a standard number for every company,we find out that R=assets/assets impairment grows with the main incoming at the same time .At last we set up a financial model to judge whether the number of assets impairment account is reasonable,and by calculating the L model,we can get the standard number of assets impairment which inform the management to decide whether to carry out the full inspectation on assets impairment.